Gold Prices Weaken Ahead of Fed Meeting

18 Dec 2024 , 08:54 AM

Ahead of the Federal Reserve’s impending monetary policy decision, investors refrained from creating large positions, which caused gold prices to firm on Wednesday.

Attention is focused on the Fed’s updated economic estimates and the dot plot, which might change expectations for the rate trajectory through 2025 and 2026. The Fed began its two-day policy meeting on Tuesday.

Spot gold increased by 0.1% to $2,649.09 an ounce. At $2,665.40, U.S. gold futures increased by 0.1%.

November’s higher-than-expected gain in U.S. retail sales adds to recent months’ warmer inflation data and raises the possibility that the Fed may postpone rate decreases in January.

According to CME’s FedWatch tool, markets have priced in a roughly 16.3% likelihood of another rate decrease in January, despite seeing a 97.1% possibility of a quarter-point cut.

Later this week, the Bank of England, Bank of Japan, Riksbank, and Norges Bank are anticipated to make their policy decisions.

Chile’s central bank extended an easing cycle that started last year by lowering its benchmark interest rate by 25 basis points to 5.00% on Tuesday. The central bank also issued a short-term inflation warning.

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