Mumbai, 14 Dec (Commoditiescontrol): Gold prices declined on Friday, retreating from a five-week high reached in the previous session, as the U.S. dollar strengthened. Despite the dip, gold remained poised for a weekly gain, supported by expectations of an interest rate cut by the Federal Reserve next week.
Spot gold fell 0.8% to $2,658.89 per ounce, weighed down by the dollar hovering near its highest level in over two weeks. U.S. gold futures also dropped, losing 1.1% to settle at $2,678.50. However, for the week, gold prices have risen nearly 1%, underpinned by optimism over a likely shift in monetary policy.
Market participants are almost certain of a 25-basis-point rate cut at the Federal Reserve's meeting scheduled for December 17-18, with traders assigning a 97% probability to the move. All eyes are now on Fed Chair Jerome Powell’s upcoming comments, as investors look for insights into the central bank's monetary policy outlook for 2025. Discussions around President-elect Donald Trump’s proposed tariff plans, which are expected to fuel inflation, are also shaping market sentiment.
Gold has had a stellar year, breaking multiple record highs, driven by easing monetary policies, aggressive central bank purchases, and heightened safe-haven demand amidst economic uncertainty. Typically, higher interest rates deter investment in non-yielding assets like gold, but the prospect of lower rates continues to boost its appeal.
Meanwhile, other precious metals also declined on Friday. Spot silver slipped 1.7% to $30.42 per ounce, platinum dropped 1.1% to $919.85, and palladium fell 1.3% to $957.35. All three metals were set to end the week with losses, reflecting broader market pressures.
As the Federal Reserve decision approaches, gold’s trajectory will largely depend on how monetary policy adjustments unfold and how markets respond to evolving inflationary trends.
(By Commoditiescontrol Bureau: 09820130172)
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