Gold Edges Lower in Thin Trade as Dollar Firms
Gold prices eased on Monday on a firmer dollar, in thin, holiday-season trade and as investors sought further clues on the U.S. Federal Reserve's monetary policy for next year after its latest meeting signaled easing would be gradual.
Spot gold was down 0.2% at $2,616.06 per ounce, as of 1158 GMT. U.S. gold futures eased 0.6% to $2,630.00.
The dollar index (.DXY), opens new tab was up 0.5% against its rivals and hovered around a two-year high. A stronger dollar reduces gold's appeal for holders of other currencies.
"(It's a) quiet day with lower liquidity and limited data releases during the holiday season," UBS analyst Giovanni Staunovo said.
"We retain a constructive outlook for gold in 2025, targeting a move to $2,800/oz by mid-2025."
The Fed cut rates by 25 basis points on Dec. 18, although the central bank's predictions of fewer rate cuts in 2025 resulted in a decline in gold prices to their lowest level since Nov. 18 last week.
Non-yielding gold tends to thrive in a low interest rates environment.
U.S. consumer spending increased in November, supporting the Fed's hawkish stance, a sentiment that was also shared by San Francisco Fed President Mary Daly.
"Presently, we are in a lull for Christmas week with the gold price trending sideways. Federal Reserve policy is clear with expectations of rising interest rates in the second half of the year," said Michael Langford, chief investment officer at Scorpion Minerals.
Source : Reuters
