Gold prices experienced a decline on Monday amid thin trading conditions as investors awaited key economic data from the U.S. that could impact the Federal Reserve’s interest rate outlook for 2025 and the policies of incoming President Donald Trump.
Key Details:
Current Market Status:
Spot gold fell 0.6% to $2,604.49 per ounce by 01:42 p.m. ET (1842 GMT).
U.S. gold futures settled 0.5% lower at $2,618.10.
Market Commentary:
Peter Grant, vice president and senior metals strategist at Zaner Metals, attributed the dip to “holiday thin trade” and potential book squaring before year-end.
Geopolitical Context:
Geopolitical tensions are expected to persist into the new year, with central banks continuing their gold purchases.
The U.S. debt situation is anticipated to worsen under the Trump administration, potentially increasing the deficit and bolstering safe-haven demand for gold.
Yearly Performance:
Gold has surged nearly 27% this year, reaching a record high of $2,790.15 on October 31 as investors flocked to the metal amid geopolitical uncertainty and U.S. rate cuts.
Anticipated Policy Changes:
There is growing anticipation of significant U.S. policy shifts in 2025, including potential tariffs, deregulation, and tax changes, as Trump prepares to assume office in January.
Federal Reserve Insights:
Earlier this month, Fed Chair Jerome Powell indicated a cautious approach to further rate cuts after a recent quarter-point reduction, aligning with market expectations.
Upcoming Economic Data:
A series of U.S. economic reports scheduled for next week will include:
Job openings figures
The ADP employment report
Minutes from the Fed’s December FOMC meeting
The U.S. employment report
These data points will be critical for assessing the health of the economy.