Gold prices stabilized in the middle of the European session on Monday, November 3rd, the opening session of the week, with some declines. This was influenced by the strengthening US dollar, which was weakened by reduced expectations of a US interest rate cut, in addition to Beijing’s decision to end the tax exemption policy applied to some gold retailers. The yellow metal traded down by approximately 0.14%, at $3,996 per ounce, while silver traded at $48.59 per ounce, down 0.13%.

Beijing shocked markets over the weekend on Saturday by abolishing the complete exemption from value-added tax (VAT) on gold sold by retailers to consumers after purchase from the Shanghai Gold Exchange, whether sold directly or after processing, effective November 1st, according to new policies announced by the Ministry of Finance. This could affect demand in the world’s largest consumer market and hinder the buying of the precious metal. Meanwhile, expectations for a Federal Reserve interest rate cut in December have declined. Markets are now pricing in a 70% probability of a 25-basis-point cut in December, according to the CME FedWatch tool, down from over 95% before last week’s Fed meeting. This follows Fed Chair Jerome Powell’s statement that a December rate cut is data-dependent and not a certainty.

Markets are awaiting US private-sector and non-farm payroll data this week, as well as the Purchasing Managers’ Index (PMI) figures. The US government shutdown continues into its second month with no real negotiations underway to resolve the crisis.

The US Dollar Index (USD) is up 0.10% in midday trading, nearing its highest level in three months, marking its fourth consecutive session of gains.

Platinum is trading at $1,598, up 1.96%, while palladium is up approximately 1.41%, trading at $1,454.