Gold prices rise slightly higher early this week as the market eyes the upcoming Federal Reserve meeting. Spot gold increased by 0.1%, trading at $2,652.07 per ounce as of 0155 GMT. Although U.S. gold futures dropped by 0.2%, the focus remains on the central bank's potential interest rate decision.
Analysts widely expect a 25 basis point rate cut during the Fed’s December 17–18 meeting. However, attention is shifting toward the central bank's tone regarding future rate adjustments. According to market strategist Yeap Jun Rong, the Fed may lean toward a "hawkish cut," signaling a pause in January due to persistent inflation and economic resilience.
Investors have already priced in a 93.4% chance of a 25 basis point cut this week. However, only an 18% chance of another reduction in January has been predicted, based on CME’s FedWatch tool. This cautious outlook reflects concerns over economic uncertainties and geopolitical tensions.
Non-yielding assets like gold often benefit from lower interest rates and geopolitical instability. Recent Israeli strikes in Gaza, resulting in multiple casualties, have added to the economic uncertainty, further supporting gold prices.
Despite the recent uptick, gold prices face resistance at the $2,720 level. This threshold, tested twice in the past month, remains a key challenge for buyers aiming for further upside. Market experts believe overcoming this level could open doors to more significant price increases.
Spot silver remained flat at $30.54 per ounce, while platinum dropped 0.3% to $922.05. Palladium, however, showed modest gains, rising 0.4% to $956.58 per ounce.
For more insights into the rise of gold prices and Forex trading, visit our website to stay updated: Fixio Markets.
Gold prices rise as investors anticipate the Fed's interest rate decision. Learn more about market trends and key resistance levels.
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