Gold Prices Rise Ahead of Fed Meeting

16 Dec 2024 , 10:13 AM

As investors’ attention shifted to the Federal Reserve’s meeting on December 17–18, when it is anticipated to announce its third interest rate decrease of the year, gold prices strengthened on Monday.

According to CME’s FedWatch tool, markets have priced in a roughly 18% possibility of another reduction in January, but they fully expect a drop at the next meeting.

Spot gold was still trading at $2,649.53 an ounce. At $2,668.00, U.S. gold futures fell 0.3%.

While the Fed’s rhetoric regarding rate cuts in 2025 is of interest, investors consider it a near certainty that the central bank will lower rates by a quarter of a percentage point this week.

On the geopolitical front, Israeli military forces claimed their air and ground troops in the northern part of the enclave killed dozens of militants and seized others, while medical professionals said that Israeli strikes in Gaza killed at least 53 Palestinians, including a journalist and rescue workers.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust, reported that its holdings decreased by 0.53% from 868.50 tonnes on Thursday to 863.90 tonnes on Friday.

While China’s stimulus measures did nothing to boost consumer confidence in the important market, domestic price increases during the wedding season limited demand, causing gold discounts in India to expand last week to their greatest level in more than two months.

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