Gold prices fell in Asian trade on Monday, pressured by improving risk appetite following a sharp rebound in bets on a December interest rate cut by the U.S. Federal Reserve. 

A recovery in equities and other risk-driven markets largely sapped demand for gold, as did more reports that the U.S. was working on a Russia-Ukraine ceasefire. 

But lingering concerns over global fiscal health and a China-Japan diplomatic spat still kept gold above $4,000 an ounce. Anticipation of a barrage of key U.S. economic readings this week also limited gold’s losses, as did the prospect of lower rates in the near-term. 

Spot gold fell 0.3% to $4,052.53/oz, while gold futures for December fell 0.7% to $4,086.10/oz by 01:07 ET (06:07 GMT). 

Gold lags as Dec rate cut bets boost risk 

Markets sharply dialed up their expectations for a December interest rate cut after New York Fed Governor John Williams said the central bank still had reason to trim next month.

Williams cited potential risks to the labor market, while also noting that upside risks for inflation had eased. 

Traders were pricing in a 67.3% chance for a 25 basis point cut during the Fed’s December 9-10 meeting, a sharp reversal from the 39.8% chance seen last week, CME Fedwatch showed. 

Other precious metals advanced on Monday, while gold’s losses were also limited by the renewed prospect of U.S. rates falling in the near-term. Spot platinum rose 1.4% to $1,537.65/oz, while spot silver fell slightly to $49.92385/oz. 

US economic data for September in focus 

Focus this week is squarely on a host of long-delayed economic prints for September, which are set to offer more cues on the world’s largest economy. 

Industrial production and capacity utilization data is due later on Monday, followed by producer price index and retail sales prints on Tuesday. 

Prints on building permits, durable goods, jobless claims, and most importantly, third-quarter gross domestic product data are due on Wednesday. 

The prints, which were delayed by a prolonged government shutdown, are expected to offer some insight into the U.S. economy going into December. But a lack of clear data for October is still expected to leave the Fed flying blind into its final meeting for the year. 

The central bank was seen turning increasingly divided over whether to cut rates further this year, driving initial expectations for a hold.