Gold prices steady below $2,700 as dollar firms with Fed in focus.
Gold prices steadied in Asian trade on Friday after logging steep losses in the prior session on strength in the dollar, as anticipation of next week’s Federal Reserve meeting favored the greenback.
Still, the yellow metal retained a bulk of its gains this week, as safe haven demand was underpinned by heightened geopolitical tensions in the Middle East and Asia.
Spot gold steadied at $2,687.44 an ounce, while gold futures expiring in February were flat at $2,709.51 an ounce by 00:00 ET (05:00 GMT). Spot prices were trading up over 2% this week.
the yellow metal tapered some of its gains this week as the dollar firmed before next week’s Fed meeting.
While the central bank is widely expected to cut rates by 25 basis points, markets have grown more uncertain over its long-term plans for rates, especially as data this week showed U.S. inflation remained sticky.
The Fed is expected to cut rates at a slower pace in 2025 after slashing rates by 75 bps so far in 2024. Expansionary and inflationary policies under incoming President Donald Trump are also expected to keep rates higher in the long term.
High rates pressure metal prices by increasing the opportunity cost of investing in non-yielding assets. While gold hit a series of record highs this year as the Fed began cutting rates, its pace of gains has slowed in recent months.
Beyond the Fed, interest rate decisions in Japan and England will also be in focus next week.(Cay)
Source: Investing.com
