(Bloomberg) — Gold gained as traders weighed the prospect for a slower pace of interest-rate cuts by the US Federal Reserve next year.
Bullion was near $2,620 an ounce after closing 0.4% lower on Monday. Investors are digesting the latest data on US consumer confidence, which unexpectedly sank in December on concerns about the economy due to uncertainty linked to the policies of the incoming Trump administration.
Gold has steadied in thin 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 expected in 2025 as Chair 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 doesn’t pay interest.
Bullion has hit successive records this year and is set to close 2024 more than 25% higher. Prices have been lifted by US monetary easing, safe-haven demand and buying by central banks, but the rally has recently slowed as the dollar strengthened after the election of Donald Trump.
The Bloomberg Dollar Spot Index was flat, after climbing 0.3% in the previous session. A stronger greenback makes commodities priced in the currency more expensive for most buyers.
Spot gold rose 0.2% to $2,618.93 an ounce at 7:40 a.m. in London. Palladium and silver also increased, while platinum fell.
–With assistance from Preeti Soni.
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