Gold poised for weekly gain ahead of potential Fed rate cut

FE Team | Published: December 13, 2024 23:47:33

Gold prices edged lower on Friday but were still on track to finish the week higher as attention turned to the US Federal Reserve's December policy meeting at which it is widely expected to deliver its third interest rate cut this year, reports Reuters.
Spot gold was down 0.5per cent at $2,668.89 per ounce at 1104 GMT, as the US dollar hovered near its highest in more than two weeks. US gold futures fell 0.8per cent to $2,689.10.
Bullion is still up more than 1per cent so far this week after a bout of profit taking was triggered when prices hit a five-week high on Thursday.
"We have reached the time of year when convictions are low, and positions are being held on a short leash, meaning any price reversal - in both directions - will quickly be met with position-squaring," said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold is expected to consolidate through year-end before resuming its upward trajectory in 2025, potentially reaching the $3,000 target, Hansen said.
Traders are now focused on the Fed's Dec. 17-18 meeting, with markets predicting a 97per cent chance of a 25 basis point rate cut, according to the CME Group's FedWatch Tool.
Fed Chair Jerome Powell's commentary will be scrutinised to gauge the outlook for 2025 as inflation remains above the central bank's 2per cent annual target.
Nicky Shiels, head of metals strategy at MKS PAMP SA, said developing macro headwinds should cap gold price rallies in the first half of 2025.