Gold prices were poised for a weekly decline on Friday after the Federal Reserve’s verdict on its monetary policy easing cycle signaled a slowdown in rate cuts, as attention shifted to U.S. personal consumer spending data, due later today.
Spot gold was little changed at $2,596.89 an ounce, at 0326 GMT, and is down about 2% since the start of the week.
U.S. gold futures rose 0.1% to $2,611.30.
Gold consolidates as “investors wait for Trump to return to office next year and the Fed will also meet meeting by meeting, taking into account the changing data and seeing what is part of the policy Trump’s trade policy,” said Soni Kumari, commodities strategist at ANZ.
Investors are now awaiting core data from the PCE index, the Fed’s preferred inflation measure, for more clues about the U.S. economic outlook.
The Fed cut rates by 25 basis points and the cautious note struck by its economic projections and the expected slowdown in rate cuts pushed gold to its lowest point since November 18 on Wednesday.
Data showed Thursday that the U.S. economy grew faster than expected in the third quarter, while jobless claims also fell more than expected, reinforcing expectations that the central bank will take a cautious approach to policy relaxation.
In 2025, regional Fed bank presidents will become voters on the central bank’s rate-setting committee, raising the risk that any further interest rate cuts next year will spark more divisiveness, like that expressed Wednesday by the director of the Cleveland Fed.
Higher rates reduce the attractiveness of the asset without yield.
According to Wang Tao, technical analyst at Reuters, spot gold could retest support at $2,582 per ounce.
Silver had its worst week since December 2023. Spot silver fell 0.4% to $28.92 an ounce.
Platinum fell 0.3% to $920.80 and palladium stabilized at $906.47. Both metals were poised for weekly losses.
