Gold prices are holding steady at around $2,600 per ounce despite a challenging week for the market. As of December 20, 2024, spot gold is trading at $2,596.82 per ounce, reflecting a slight decline of 1.6% for the week. This stability comes in the wake of the U.S. Federal Reserve's recent signals indicating a slower pace of rate cuts, projecting only two cuts in 2025, which has led to a reassessment of interest-rate expectations among traders. Fed Chair Jerome Powell emphasized that more progress on inflation is required before further reductions can be confidently made. [1c2c6712]
The latest economic data has shown resilience, with U.S. GDP growth revised up to 2.2%, reducing the urgency for immediate rate cuts. This has contributed to a stronger U.S. dollar, which typically exerts downward pressure on gold prices. Analysts from TD Securities have predicted a potential decline in gold prices to $2,537 per ounce, reflecting the cautious outlook on future rate adjustments. [1c2c6712]
Despite the recent downturn, gold has surged 26% this year, largely driven by U.S. monetary easing and increased central bank buying. However, the rally has stalled since early November, coinciding with Donald Trump's election victory, which has bolstered the dollar and diminished gold's appeal as a safe-haven asset. [cb8b9b]
Geopolitical uncertainties and risks of a government shutdown continue to support gold's status as a safe-haven investment. As traders navigate these complexities, the upcoming release of key economic data, including U.S. consumer confidence and durable goods orders, will be closely monitored for further insights into inflation trends and consumer spending. [1c2c6712]
In addition to gold, other precious metals are also experiencing fluctuations, with platinum futures down 0.4% to $921.75 and silver futures also down 0.4% to $29.302. Meanwhile, copper prices have seen a slight increase of 0.4% to $8,925.30 per ton, buoyed by strong U.S. economic data and hopes for stimulus measures in China. [cb8b9b]