Gold prices ticked lower on Friday, but remained on track for a weekly gain ahead of the U.S. Federal Reserve’s policy meeting next week where the central bank is widely expected to deliver its third rate cut for the year.
Spot gold was down 0.3% at $2,672.25 per ounce, as of 0914 GMT. US. Gold futures fell 0.65 to $2,692.70.
Bullion is up more than 1% so far this week, after prices hit a five-week high in the last session, which triggered profit-taking.
“We have reached the time of the year when convictions are low, and positions are being held on a short leash, meaning any price reversal- in both directions- will quickly be met with position-squaring,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold is expected to consolidate through year-end before resuming its upward trajectory in 2025, potentially reaching the $3,000 target, Hensen said.
Traders are now focused on the Fed’s Dec. 17-18 meeting, with markets predicting a 96.4% chance of a 25-basis-point rate cut, according to the CME Group’s FedWatch Tool.
Fed Chair Jerome Powell’s commentary will also be closely watched to gauge the outlook for 2025 as inflation remains above central bank’s 2% annual target.
Data on Thursday showed that the US producer prices rose more than expected in November, accompanied by an unexpected rise in the number of Americans filing new applications for jobless benefits.
US consumer prices also increased in November by the most in seven months.
“Markets continue to price multiple rate cuts by the Fed next year due to risks of a softening labor market, most recently understood by the unexpected surge in unemployment claims,” said Jigar Trivedi, senior analyst at Reliance Securities.
Spot silver shed 0.75 to $30.74 ounce. Platinum added 0.1% at $931.48, while palladium fell 0.5% to $965.58. Both metals were set for weekly gains.
Source: reuters.com