Gold prices remained stable on Monday, January 6, as investors awaited crucial U.S. economic data later this week, which may offer insights into the Federal Reserve’s future interest rate decisions.
Spot gold was flat at $2,639.56 per ounce as of 0034 GMT, while U.S. gold futures edged down by 0.1% to $2,652.00. Market attention is focused on the upcoming U.S. jobs report, scheduled for release on Friday. The report could provide further indications of the Federal Reserve’s rate plans following its recent move to scale back projected interest rate cuts for 2025, a decision that unsettled financial markets.
In addition to the jobs report, investors are also monitoring data on ADP hiring, job openings, and the release of minutes from the Fed’s most recent policy meeting.
Gold has traditionally performed well in a low-interest-rate environment, acting as a hedge against inflation and geopolitical risks. However, the outlook for the precious metal may face headwinds. U.S. President-elect Donald Trump’s return to office on January 20, coupled with his proposed tariffs and protectionist policies, is expected to stoke inflation, potentially influencing the Fed to adopt a more cautious approach to interest rate cuts. After three rate reductions in 2024, the Fed now forecasts just two cuts in 2025 due to ongoing inflationary pressures.
Richmond Federal Reserve President Thomas Barkin noted on Friday that the central bank’s benchmark policy rate is likely to remain restrictive until there is clearer evidence that inflation is on track to return to its 2% target.
In market activity, holdings in the SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, fell by 0.17% to 871.08 tonnes on Friday, down from 872.52 tonnes on Thursday.
In India, gold discounts remained unchanged last week, as high prices continued to deter buyers. Meanwhile, Chinese dealers raised premiums in anticipation of stronger demand ahead of the Chinese New Year.
As for other precious metals, spot silver rose by 0.1% to $29.64 per ounce, while platinum dropped by 0.7% to $931.70, and palladium decreased by 0.4% to $918.63.
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