Gold confined to range ahead of Fed rate decision, USD steadies
Gold (XAU/USD) kicks off the week on a quiet note, with traders reluctant to take fresh positions ahead of the Federal Reserve’s (Fed) interest rate decision on Wednesday. At the time of writing, XAU/USD is trading around $4,210, extending its consolidation phase within the familiar one-week range.
Attention remains squarely on the Fed’s monetary policy meeting, with markets gearing up for another interest rate cut at the final policy decision of 2025, which would bring the Federal Funds Rate down to the 3.50%-3.75% range.
However, the latest Personal Consumption Expenditures (PCE) data and mixed labour indicators are prompting markets to consider that the Fed may opt for a more measured approach to additional monetary policy easing heading into 2026, which in turn is helping the US Dollar (USD) stabilise and pushing Treasury yields higher.
According to the CME FedWatch Tool, markets assign around an 87% probability of a 25 basis point (bps) rate cut at the upcoming Fed meeting.
According to the World Gold Council (WGC) report published on December 5, global gold ETFs recorded their sixth consecutive month of inflows in November, adding US$5.2 billion as assets under management climbed to a record US$530 billion.
Beyond monetary policy, geopolitical risks also remain in focus, as the Russia-Ukraine war and renewed tensions between Thailand and Cambodia continue to provide a supportive backdrop for Gold.
Source: FXstreet.com
