Gold Rises as Traders Focus on Uncertain 2025 Interest Rate Path
Gold rose as traders weighed the prospect of slower interest rate cuts by the U.S. Federal Reserve next year.
Bullion prices were near $2,620 an ounce after closing 0.4% lower on Monday. Investors digested the latest data on U.S. consumer confidence, which unexpectedly fell in December on concerns about the economy due to uncertainties related to the policies of the incoming Trump administration.
Gold has been steady in quiet holiday trading but a stronger dollar is still weighing on the market, Pranav Mer, an analyst at JM Financial Services Ltd. in Mumbai, said in a note on Tuesday.
Earlier this month, the Fed reined in the number of rate cuts it expects in 2025 as Chairman Jerome Powell made clear that the central bank needs to see price pressures ease further. Lower borrowing costs are typically a positive for the precious metal, which pays no interest
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Bullion has hit back-to-back records this year and is set to finish 2024 up more than 25%. Prices have been buoyed by U.S. monetary easing, safe-haven demand and central bank buying, but the recent rally has slowed as the dollar strengthened after the election of Donald Trump.
The Bloomberg Dollar Spot Index was flat, after rising 0.3% in the previous session. A stronger U.S. dollar makes commodities priced in the currency more expensive for most buyers.
Spot gold rose 0.2% to $2,618.93 an ounce as of 7:40 a.m. in London. Palladium and silver also rose, while platinum fell.
Source: Bloomberg
