(Bloomberg) — Gold (GC=F) traded in a narrow band as traders weighed the prospect of a slower pace of interest-rate cuts by the US Federal Reserve next year.
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Bullion was near $2,615 an ounce after closing down 0.4% on Monday. Investors are digesting the latest data on US consumer confidence, which unexpectedly sank amid uncertainty around the policies of the incoming Trump administration.
Gold steadied during thin holiday trading but a stronger dollar is still weighing on the market, Pranav Mer, an analyst at JM Financial Services Ltd. in Mumbai, said in a note Tuesday.
Earlier this month, the Fed reined in the number of rate cuts expected in 2025 as Chair Jerome Powell made clear that the central bank needs to see price pressures ease further. Lower borrowing costs are typically positive for bullion, which doesn’t pay interest.
Gold has hit successive records this year and is set to close 2024 more than 25% higher. Prices have been lifted by US monetary easing, haven demand and buying by central banks, but the rally recently slowed as the dollar strengthened after the election of Donald Trump.
The Bloomberg Dollar Spot Index rose as much as 0.1% Tuesday, after climbing 0.3% in the previous session. A stronger greenback makes commodities priced in the currency more expensive for most buyers.
Spot gold edged up 0.1% to $2,615.12 an ounce at 11:12 a.m. in London. Palladium and palladium also rose, while silver fell.
—With assistance from Preeti Soni and Jack Ryan.
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