Gold edges higher with spotlight on Fed meeting
GOLD prices inched higher on Monday as investors anticipated a potential interest rate cut by the Federal Reserve this week, with focus on the central bank’s language on rate cuts next year.
Spot gold was up 0.1 per cent to US$2,652.07 per ounce as of 0155 GMT. Meanwhile, US gold futures slipped 0.2 per cent to US$2,670.90.
“A 25 basis point rate cut this week has been fully priced by markets, so the focus will be on whether this will be a ‘hawkish cut’, where US policymakers may set the stage for a potential rate hold into January, given above-target inflation, some economic resilience and uncertainties over Trump’s policies ahead,” IG market strategist Yeap Jun Rong said.
Investors view it as a near-given that the Fed will cut rates by a quarter point at its Dec 17-18 meeting. Markets predict a 93.4 per cent chance of a 25 basis points cut, but have only priced in a roughly 18 per cent chance of another reduction in January, according to CME’s FedWatch tool.
On the geopolitical front, Israeli strikes in Gaza killed at least 53 Palestinians, including a journalist and rescue workers, medics said, while the Israeli military said its air and ground forces in the north of the enclave killed dozens of militants and captured others.
Non-yielding bullion tends to shine in a lower interest rate environment and during economic or geopolitical uncertainty.
“Over the past month, gold prices have pulled back from the US$2,720 level on at least two occasions, which makes it a key resistance for buyers to overcome ahead to pave the way for more upside,” Yeap said.
Spot silver was flat at US$30.54 per ounce, platinum shed 0.3 per cent to US$922.05, while palladium gained 0.4 per cent to US$956.58. REUTERS
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