Gold declines as traders trim bets that US Fed will cut rates

Gold declined as expectations of a Federal Reserve rate cut eased.

Swap traders trimmed their bets on a December interest rate cut to about 50% from more than 60% earlier this week. Higher rates are typically negative for bullion as it pays no interest.

While the longest government shutdown in US history is poised to end, it could still take days, or even weeks, for the federal bureaucracy to fully restart and dig out of the backlog of government reports. For now, traders are not expecting the data to show enough weakness to justify a rate cut.

Still, bullion is up 59% this year as investors and central banks step up purchases to hedge against growing fiscal unease in some of the world’s biggest economies. The precious metal remains on track for its best annual performance since 1979.