Gold Up as Traders Weigh U.S. Rate Path
Gold edged higher after posting its biggest annual gain since 2010, with traders pricing in the prospect of slower monetary easing by the Federal Reserve in 2025.
Bullion was trading near $2,633 an ounce after a 27% rally in 2024, driven by the Fed’s rate-cutting cycle, continued safe-haven demand and a wave of central bank buying.
“Despite the Fed’s cautious tone, continued central bank buying and geopolitical uncertainty are expected to keep gold in focus as a preferred safe-haven asset,” Kaynat Chainwala, an analyst at Kotak Securities, wrote in a note.
Investors are now focused on the path of interest rates in the U.S., after Chairman Jerome Powell last month signaled greater caution over how quickly the central bank can continue to reduce borrowing costs amid renewed concerns about inflation. Lower interest rates are usually positive for bullion, which pays no interest.
Key economic data due later in the week, including U.S. jobless claims and a manufacturing report, will be closely watched for clues on the Fed’s easing trajectory.
Spot gold rose 0.4% to $2,634 an ounce as of 7:38 a.m. in London. The Bloomberg Dollar Spot Index fell. Silver, palladium and platinum all rose.
Source: Bloomberg
