Dec 17 2024: Gold prices remained largely unchanged during Asian trading on Tuesday as investors adopted a cautious stance ahead of major central bank meetings this week, particularly the Federal Reserve.
The yellow metal traded within a narrow range of $2,600 to $2,700 per ounce as traders favored the U.S. dollar before key rate decisions from the Fed, the Bank of Japan (BOJ), and the Bank of England (BOE). Spot gold inched up 0.1% to $2,654.99 an ounce, while February gold futures rose 0.1% to $2,671.91 by 23:19 ET (04:19 GMT).
Fed Policy Decision in Focus Amid Rate-Cut Outlook
Investors anticipate the Federal Reserve will announce a 25-basis-point rate cut at the end of its two-day meeting on Wednesday. However, market attention will center on the Fed’s forward guidance regarding interest rates, with growing expectations of a slower pace of easing in the year ahead.
Recent U.S. data pointing to persistent inflation and a resilient labor market has led to increased caution, giving the Fed more flexibility to take a gradual approach to rate reductions.
The prospect of elevated U.S. interest rates has bolstered the dollar in recent sessions, pushing gold prices further below record highs. Higher interest rates typically weigh on gold by raising the opportunity cost of holding non-yielding assets.
Aside from the Fed, the BOE and BOJ will also announce their monetary policy decisions this week. The BOE is widely expected to lower rates to support a sluggish British economy, while analysts remain divided over whether the BOJ will opt for another rate hike following its landmark policy shift earlier this year.
Other precious metals showed limited movement. Platinum futures hovered at $941.35 an ounce, while silver futures edged down 0.3% to $30.955 an ounce.
Copper Prices Slide Amid Lingering China Concerns
In industrial metals, copper prices retreated on Tuesday, weighed down by ongoing concerns about weak economic growth in China, the world’s largest copper importer.
Benchmark copper futures on the London Metal Exchange dropped 0.2% to $9,052.0 a ton, while February copper futures slipped 0.5% to $4.1745 a pound.
The decline followed lackluster economic data from China on Monday, which underscored continued struggles in the country despite Beijing’s recent stimulus measures. While China’s copper demand has shown resilience so far, traders are increasingly concerned about a potential downturn amid worsening economic conditions.
