Gold prices saw an uptick on Monday as market attention shifted toward the Federal Reserve’s upcoming meeting on December 17-18. Investors are anticipating a third interest rate cut for the year, with many expecting a quarter-point reduction at this week’s meeting.
According to the CME Group’s FedWatch Tool, there is an 18% chance of another rate cut in January, though a reduction this week is almost certain. As a result, gold prices rose, with spot gold trading at $2,649.53 per ounce. However, U.S. gold futures dipped by 0.3%, settling at $2,668.00.
While market participants are watching the Fed‘s stance on future rate cuts, the immediate focus is on the decision expected this week. Investors are particularly keen on how the central bank’s actions may impact broader economic conditions and the gold market in the short term.
On the geopolitical front, Israeli forces reported significant operations in northern Gaza, claiming to have killed dozens of militants and captured others. However, Palestinian medical officials confirmed at least 53 deaths from Israeli airstrikes, including a journalist and rescue workers. This ongoing conflict has added volatility to global markets, further influencing gold’s appeal as a safe haven.
Meanwhile, the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, reported a 0.53% decline in holdings, dropping from 868.50 tonnes on Thursday to 863.90 tonnes on Friday.
In Asia, China’s recent stimulus efforts have failed to boost consumer confidence, particularly in the gold market. In India, seasonal price hikes linked to the wedding period have dampened demand, leading to increased gold discounts. Last week, gold discounts in India hit their highest level in over two months, reflecting a slowdown in consumer purchasing power despite the festive season.
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