Gold falls below USD 3,950 as global markets sink into uncertainty

Gold (XAU/USD) fell 1.5% on Tuesday to below USD 3,950 an ounce as investors simultaneously pulled out of equities, metals and even bonds.

The S&P 500 was down 1% by mid-session and the Nasdaq fell nearly 2%. Meanwhile, the US dollar hit a three-month high, making gold more expensive for foreign buyers and adding pressure to the yellow metal’s short-term outlook.

Powell’s message and a possible pause in rate cuts

Despite the drop, gold is still up more than 50% in 2025, making it one of the year’s most successful trades. However, prices are now more than 10% below the record of USD 4,400 in late October.

At the latest Federal Reserve meeting, Jerome Powell hinted that the latest rate cut may be the last in 2025 — a remark that dampened hopes of further easing. According to the CME FedWatch tool, markets now price only a 71% chance of another cut at the 9–10 December meeting, down from more than 90% last week.