Gold Steady on Rate Cut Pessimism
Gold steadied after its biggest drop in more than three weeks as expectations for fewer U.S. interest rate cuts this year were offset by demand for safe havens ahead of Donald Trump’s return to the White House.
Bullion traded near $2,670 an ounce, after falling 1% in the previous session as traders recalibrated bets on the Federal Reserve’s easing path after a surprisingly strong U.S. jobs report reinforced views that interest rates are likely to remain on hold for longer. Higher borrowing costs tend to make the precious metal less attractive, as it doesn’t pay interest.
Gold has seen support as investors seek shelter ahead of the uncertainties surrounding Trump’s second term that begins on Jan. 20, helping it shrug off headwinds from a stronger dollar and rising bond yields. Members of the president-elect’s economic team are discussing gradually increasing rates month-to-month, according to people familiar with the matter.
Spot gold rose 0.2% to $2,667.73 an ounce as of 7:33 a.m. in London. The Bloomberg Dollar Spot Index fell 0.3%. Silver and platinum edged up, while palladium fell.
A slew of economic data due this week will provide more clues about the Fed’s interest-rate trajectory. Underlying U.S. inflation probably cooled only slightly by the close of 2024, according to a Bloomberg survey, which would add support to the central bank’s slow-moving approach to cutting.
Source: Bloomberg
