77.7%! The Fed’s December rate-hike probability suddenly surged—can gold investors sleep tonight?

What does the gold market fear most? Not rain or wind, but the Fed suddenly changing its course on interest rates!
After the release of the U.S. October nonfarm payrolls data, expectations of a December rate hike rose noticeably. Employment increased by 165k, far above expectations of 65k, while the unemployment rate also fell to 4.1%.
The report reminded the market that the U.S. labor market may not yet be weak enough to require the Fed to rush into rate cuts.
Rising rate-hike expectations typically support the dollar and Treasury yields, while gold, a non-interest-bearing asset, may face some pressure.
Simply put, as bank deposits and bonds become more attractive, some investors may reduce their gold holdings.
However, gold does not respond only to interest rates. If geopolitical risks, inflation concerns, or safe-haven demand in financial markets increase, gold may still find support.
So, 77.7% does not mean gold will fall 77.7%, nor is it a verdict on the gold market.
The real question is: will upcoming inflation data continue to give the Fed a reason to raise rates?
Gold investors may have to keep a close eye on the data again!
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