Gold edged lower on Friday as it was poised for a weekly gain as investors waited for clues on the U.S. economy to anticipate the Federal Reserve’s interest rate path for 2025 and policies of the incoming Donald Trump administration.
Spot gold was down 0.2% at $2,630.28 an ounce, as of 0221 GMT. Bullion has gained 0.3% since the start of the week.
U.S. gold futures fell 0.2% to $2,649.10.
“We’re in a holiday lull, so price action is a little lackluster, with moves perhaps exaggerated by low liquidity, said Kyle Rodda, financial markets analyst at Capital.com.
“The decision to cut interest rates has shaken market confidence about the number of cuts likely to come next year, which has worked against gold.
U.S. jobless claims fell to their lowest level in a month last week, indicating a strong labor market and potential pressure on the Fed to hold interest rates in place.
After cutting rates sharply in September and November, the Fed continued its easing in December, but hinted that it would cut rates in 2025.
The price of gold has surged nearly 28% this year, hitting a record $2,790.15 on Oct. 31, driven by substantial Fed rate cuts and escalating geopolitical tensions.
On the geopolitical level, Israel struck several Houthi targets in Yemen on Thursday, including the Sanaa international airport, killing at least six people according to Houthi media.
Gold is seen as a hedge against geopolitical unrest and inflation, but rising interest rates are reducing the appeal of this yield-free asset.
Markets are bracing for major policy changes, including tariffs, deregulation and tax changes, in 2025 when Donald Trump returns to the White House in January.
Spot silver fell 0.2% to $29.75 an ounce and palladium lost 0.3% to $922.58, while platinum gained 0.1% to $936.85 . All three metals headed for weekly gains.
