Gold Advances As Traders Focus On Uncertain 2025 Rate Path

Gold prices rose as traders weighed the possibility of a slower pace of interest rate cuts by the US Federal Reserve next year, Sybilla Gross and Preeti Soni reported for Bloomberg News.

Gold has achieved successive records this year and is on track to close 2024 more than 25% higher.

Bullion hovered near $2,620 an ounce after closing 0.4% lower on Monday.

Investors are digesting the latest data on US consumer confidence, which unexpectedly declined in December due to economic concerns linked to the incoming Trump administration's policies.

While gold has stabilized in thin holiday trading, a stronger dollar continues to weigh on the market, according to Pranav Mer, an analyst at JM Financial Services Ltd. in Mumbai, who shared these insights in a note on Tuesday.

Earlier this month, the Fed scaled back its projected rate cuts for 2025 as Chair Jerome Powell emphasized the need for further easing of price pressures. Lower borrowing costs are typically a boon for gold, which does not pay interest.

Gold has achieved successive records this year and is on track to close 2024 more than 25% higher.

The rally has been fueled by US monetary easing, safe-haven demand, and central bank buying. However, the surge has recently slowed as the dollar strengthened following Donald Trump’s election victory.