Gold Holds Steady Amid Fed Uncertainty

19 Nov 2024 , 10:46 AM

As investors awaited remarks from Federal Reserve officials for additional clues regarding the U.S. interest rate trajectory, gold prices failed to gain traction in early Asian trade on Tuesday.

Spot gold was barely changed at $2,611.79 per ounce. A weaker dollar and increased worries over the Russia-Ukraine crisis helped prices rise 2% in the previous session.

At $2,615.70, U.S. gold futures were flat.

This week, a number of Fed officials are expected to speak. After reducing rates by 75 basis points since September, recent robust economic data has sparked questions about whether the Fed will continue to do so.

The Fed may halt its rate-cutting pace if inflation is fuelled by the proposed tariffs of U.S. President-elect Donald Trump.

Non-yielding assets like bullion typically lose appeal when interest rates rise.

According to San Francisco Fed economists, inflationary pressures are still being exacerbated by a tight labour market in the United States, albeit less so than in 2022 and 2023.

Two prominent policymakers at the European Central Bank indicated that they were more concerned about the harm that anticipated additional U.S. trade tariffs would cause to the euro zone’s economic growth than they were about any effect on inflation.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings increased by 0.2% from 869.93 tonnes on Friday to 871.65 tonnes on Monday.

Spot silver was steady at $31.14 an ounce, while palladium fell 0.1% to $1,004.05. Platinum was down 0.2% at $965.36.

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