Gold Dips While Cocoa Rips

Gold is having a rough Tuesday, slipping under pressure from a stronger U.S. dollar and rising Treasury yields as investors braced for the Fed’s final rate decision of the year. The dollar rose 0.1%, which makes gold pricier for anyone not dealing in greenbacks, while 10-year Treasury yields hovered near a four-week high. Basically, it’s not a great vibe for gold bulls, who really just want one thing: lower interest rates.

The Fed is widely expected to cut rates by 25 basis points on Wednesday—CME’s FedWatch tool puts the odds at 95%. But January? Not looking so rosy. Odds of another cut sit at a chilly 18%, thanks to hotter inflation and strong retail sales in November. Gold thrives in a low-rate world, but the Fed might make it wait a bit longer.

On the flip side, New York cocoa futures are having a year so sweet it’s giving dentists nightmares. March contracts jumped 1% to yet another record high near $11,900 per metric ton, briefly surpassing Monday’s all-time intraday high of $11,925. That’s 180% gains year-to-date, for those keeping score.

While gold waits for a Fed pivot that may take its time, cocoa futures are soaring like sugar-rushed toddlers at a birthday party. Inflation, rates, and a strong dollar are real concerns, but for now, the market’s sweetest trade is all about chocolate. Gold will just have to play the long game.