Gold Holds Two-Day Decline Ahead of Expected Rate Cut in US
Gold held a two-day drop ahead of the Federal Reserve’s final interest-rate decision of the year, with traders also weighing the policy outlook for 2025.
Bullion traded near $2,650 an ounce, after falling 2.6% in the previous two sessions following mixed US data last week — including accelerating wholesale inflation and higher-than-expected jobless claims. The Fed is expected to deliver a quarter-point rate cut at its meeting on Wednesday, and swaps traders are pricing in a total of three quarter-point rate cuts over the next 12 months. Lower rates are typically positive for gold, as it doesn’t pay interest.
The precious metal has risen about 29% so far this year, putting it on track for its biggest annual gain since 2010. Its breakneck run has been supported by Fed easing, safe-haven demand and sustained buying by the world’s central banks.
Looking ahead, the World Gold Council expects prices will rise more slowly in 2025, tempered by variables like growth and inflation. Possible trade wars during US President-elect Donald Trump’s second term and complicated interest-rate outlooks may spill over into subpar economic growth, hurting demand from investors and consumers, the industry association said in its 2025 outlook report.
Spot gold was up 0.1% to $2,650.48 an ounce as of 8:04 a.m. in Singapore. The Bloomberg Dollar Spot Index was down 0.1%, after gaining 0.8% last week. Silver and platinum were little changed, and palladium edged higher.
Source : Bloomberg
