Jan 6 2025: Gold prices edged lower in Asian trading on Monday, pressured by a stronger dollar amid expectations that the Federal Reserve will adopt a slower pace of monetary easing in 2025. The yellow metal has faced consistent selling pressure since late December, following the Fed’s indication of a cautious rate-cutting approach next year.
By 00:12 ET (05:12 GMT), spot gold was down 0.1%, trading at $2,635.81 an ounce, while February gold futures dropped 0.3% to $2,646.51 an ounce.
Fed’s Hawkish Tone Boosts Dollar, Hurts Gold
The dollar surged to its highest level since November 2022 after hawkish comments from Fed officials over the weekend, further weighing on gold prices.
Governor Adriana Kugler and San Francisco Fed President Mary Daly stressed that the fight against inflation was ongoing and highlighted the resilience of the labor market. Sticky inflation and robust job growth reduce the likelihood of aggressive rate cuts, keeping traders biased toward the dollar.
Focus now turns to the upcoming U.S. nonfarm payrolls data for more insights into the labor market and interest rate trajectory.
Other Precious and Industrial Metals Also Decline
- Platinum: Fell 0.4% to $942.0 an ounce.
- Silver: Dipped slightly to $30.055 an ounce.
- Copper: March futures slipped 0.3% to $4.0655 a pound as uncertainty over China’s economic stimulus measures and upcoming inflation data weighed on sentiment.
Goldman Sachs Maintains $3,000 Forecast for 2026
Goldman Sachs revised its timeline for gold to reach $3,000 an ounce, now projecting this milestone by mid-2026. The investment bank anticipates gold prices will end 2025 at around $2,900, supported by slower Fed rate cuts and continued safe-haven demand.
In 2024, gold prices gained approximately 27%, benefiting from the Fed’s 1% rate cuts in the year’s second half and geopolitical tensions in the Middle East and Russia. However, gold faced a late-year slump as the Fed signaled a more hawkish stance for 2025.
