Gold prices surge ahead of Fed's final rate decision

Gold prices inched higher ahead of the Federal Reserve’s final interest-rate decision of the year, with market participants also focusing on the central bank's policy direction for 2025.

Bullion’s gain followed a 2.6% decline in the previous two sessions on the back of mixed US data last week — including accelerating wholesale inflation and higher-than-expected jobless claims.

The Fed is expected to cut interest rates by 25 basis points at its meeting on Wednesday, and swap traders are pricing in a total of three quarter-point cuts over the next 12 months. Lower rates are typically positive for gold, as it doesn’t pay interest.

The precious metal has risen about 29% so far this year, putting it on track for its biggest annual gain since 2010. Its breakneck run has been supported by Fed easing, safe-haven demand and sustained buying by the world’s central banks.

Looking ahead, the World Gold Council expects prices will rise more slowly in 2025, tempered by variables such as growth and inflation.

Spot gold rose 0.4% to $2,658.96 an ounce as of 10:03 a.m. in London. The Bloomberg Dollar Spot Index was little changed, after gaining 0.8% last week. Silver, palladium and platinum also crept higher.

News.Az