Gold Under Pressure as Rate-Cut Hopes Fade: Time to Buy the Dip?

Core Insights - Gold prices are under pressure due to reduced expectations for a U.S. interest-rate cut next month, with prices briefly falling below $4,000 an ounce before recovering slightly [1][3] - Central banks have significantly increased their gold purchases, with Goldman Sachs estimating a purchase of 64 tons in September, more than triple the amount in August [5] - Despite recent declines, gold is on track for its best annual performance since 1979, with a year-to-date increase of over 50% as of November 17, 2025 [4] Market Dynamics - Interest-rate swaps indicate less than a 50% chance of a December rate reduction, a notable drop from previous expectations of a quarter-point cut, negatively impacting gold's outlook [3] - The U.S. dollar has gained 1.3% over the past month, contributing to gold's underperformance, as SPDR Gold Shares (GLD) has lost approximately 7.8% in the same period [2] Central Bank Activity - The People's Bank of China (PBoC) has continued its monthly gold reserve additions, bringing its total holdings to 2,304.5 tons, indicating a bullish trend for gold [6] - India imported gold worth $14.7 billion in October, a nearly 200% year-over-year increase, with consumers purchasing an estimated $11 billion during a five-day festival [5] Investment Strategies - Bridgewater Associates' founder Ray Dalio recommends investors allocate up to 15% of their portfolios to gold, highlighting its role as a hedge against monetary debasement and geopolitical uncertainty [7] - Gold ETFs such as SPDR Gold Trust (GLD), iShares Gold Trust (IAU), and SPDR Gold MiniShares Trust (IAUM) are suggested as potential investment opportunities for those looking to capitalize on the long-term bullish trend in gold [8]