PT Rifan Financindo Berjangka – Gold Heads for Weekly Decline as 2025 Rate-Cut Optimism Dwindles
Gold headed for a weekly drop, as traders weighed the interest-rate outlook after the Federal Reserve dialed back rate-cut expectations for next year.
Bullion traded near $2,590 an ounce, and is down about 2% for the week. The Fed reduced rates on Wednesday, but investors were more focused on comments from Chair Jerome Powell, who said that while the bank was “on track to continue to cut,” officials would first have to see more progress on inflation. Lower rates are typically a positive for gold, as it doesn’t pay interest.
Traders were also weighing US GDP data on Thursday, which showed the economy remains resilient — weakening the need for imminent rate cuts. Meanwhile, consumer spending was revised up to 2.2%, adding to the case for a slower pace of easing. Markets will now be closely watching the last noteworthy piece of data for the year — personal consumption expenditures for November — due Friday.
The precious metal has risen about a quarter this year in a record-breaking run that’s been supported by monetary easing in the US, safe-haven demand, and sustained buying by the world’s central banks. The rally has stalled since early November, however, as Donald Trump’s election victory buoyed the dollar.
Spot gold was little changed at $2,593.29 an ounce at 8:11 a.m. in Singapore, after edging up 0.3% on Thursday. The Bloomberg Dollar Spot Index was 0.1% higher, following a gain of 1.2% over the previous three sessions. Silver, palladium and platinum all fell.
Source : Bloomberg
Gold defies high US yields, climbs despite Fed’s aggressive stance
On Thursday, the Gold price trimmed some of its losses from Wednesday, posting a timid advance of 0.20%. Thursday’s minor gain follows the Federal Reserve’s (Fed) decision to adopt a more gradual stance, pushing against three interest rate cuts for 2025. The XAU/USD trades at $2,588 after reaching a daily high of $2,626.
The US economic docket on Thursday witnessed a drop in Americans asking for unemployment benefits. In the meantime, US GDP grew 3.1% YoY in Q3 in its final release, according to the US Bureau of Economic Analysis.
Despite this, the financial markets are focused on deciphering what will happen in 2025. Fed Chair Jerome Powell and the Federal Open Market Committee (FOMC) board reduced borrowing costs by 25 basis points. It wasn’t unanimous, however, as Beth Hammack of the Cleveland Fed voted to maintain the “status quo.”
In addition, Fed officials have turned their attention to inflation, as expressed in the dot plot. They forecast two 25 bps rate cuts in 2025 and two more for 2026.
In the meantime, the US government is only days away from being shut down with US President-elect Donald Trump pressuring Republicans in the House of Representatives to increase or eliminate the debt ceiling. PT Rifan Financindo Berjangka.
Source: Fxstreet