Gold prices remained largely unchanged in Asian trading on Friday, as year-end market activity remained subdued. While the metal showed minimal movement, it was poised to edge higher this week, with cautious market sentiment following the U.S. Federal Reserve’s recent hawkish stance.
Spot gold held steady at $2,633.40 per ounce, while February gold futures slipped 0.2%, trading at $2,649.91 per ounce at 00:20 ET (05:20 GMT).
Year-end trading typically sees lower volumes and less price volatility, as institutional traders and other market participants wind down their positions ahead of the holiday season. With fewer major economic data releases and policy decisions, catalysts for significant price swings are reduced.
Despite the subdued trading environment, gold is expected to finish the week with a 0.3% gain, following a more than 1% drop the previous week. The strengthening U.S. dollar, fueled by the Fed‘s recent shift towards a more hawkish monetary policy, continues to exert pressure on the precious metal.
Stronger Dollar Puts Pressure on Gold
The U.S. Dollar Index was slightly higher in Asian trading on Friday, holding near a two-year high reached last week. A stronger dollar tends to weigh on gold, making the precious metal more expensive for buyers using other currencies.
Gold prices took a hit after the Federal Reserve’s policy meeting last week, which revealed a shift in expectations for rate cuts in 2025. Market participants had previously anticipated four rate cuts, but the Fed signaled that only two cuts would be likely. Higher interest rates typically make gold less attractive compared to interest-bearing assets such as bonds.
Other Precious Metals Hold Steady
Other precious metals followed a similar trend, with little movement on Friday. Platinum futures were unchanged at $954.50 per ounce, while silver futures held steady at $30.38 per ounce.
Copper Prices Rise on Supply Concerns
In the industrial metals sector, copper prices saw a modest increase, bolstered by news of an ongoing shortage of copper concentrates. According to a Reuters report, leading copper smelters in China have set lower processing charge guidance for the first quarter of 2025, signaling continued tightness in supply.
At a meeting in Shanghai, representatives from the China Smelters Purchase Team agreed on new treatment and refining charges for copper concentrates, setting them at $25 per metric ton and 2.5 cents per pound. These rates represent a 28.6% decrease from the fourth-quarter guidance of $35 per ton and 3.5 cents per pound.
Despite the positive news, copper’s gains were capped by the strong dollar. Benchmark copper futures on the London Metal Exchange rose 0.5% to $9,008.50 per ton, while February copper futures edged down 0.1%, trading at $4.1360 per pound.
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