Gold prices hold steady ahead of Fed rate decision; copper declines on weak China data
Gold prices remained subdued in Asian trade on Monday, consolidating recent losses as investors stayed focused on the U.S. dollar ahead of the Federal Reserve’s final meeting of the year.
Meanwhile, copper prices came under pressure due to a stronger dollar and mixed economic data from China, which failed to inspire confidence in demand.
Gold had seen some support last week from expectations of lower near-term U.S. interest rates, but this was offset by uncertainty over the long-term rate outlook, which the Fed is expected to clarify this week.
Spot gold rose 0.2% to $2,653.47 an ounce, while gold futures for February delivery fell 0.2% to $2,671.05 an ounce by 23:02 ET (04:02 GMT).
Gold under pressure as Fed meeting looms
Traders remain cautious ahead of the Fed meeting this week. The central bank is widely anticipated to cut rates by 25 basis points, marking a total reduction of 100 bps in 2024. However, market focus remains on the Fed’s outlook, especially following data showing sticky inflation in November and a resilient labor market.
The Fed is expected to adopt a more cautious stance on future rate cuts, which could keep rates elevated in the long term. Higher rates tend to weigh on gold and other non-yielding assets, as they increase the opportunity cost of holding gold. The dollar has strengthened on these expectations, further pressuring gold prices over the past week.
Despite these headwinds, analysts at ANZ remain bullish on gold, forecasting spot prices to reach $2,900 an ounce in 2025. However, they expect gains to moderate next year, with high economic and geopolitical risks continuing to support demand for safe-haven assets.
Other precious metals also declined on Monday. Platinum futures fell 0.4% to $921.75 an ounce, while silver futures dipped 0.1% to $31.005 an ounce.
Copper dips as China data disappoints
Benchmark copper futures on the London Metal Exchange fell 0.2% to $9,044.0 per ton, while February copper futures dropped 0.4% to $4.1780 per pound.
Copper prices extended losses as mixed economic data from China weighed on sentiment. While industrial production met expectations in November, retail sales growth slowed sharply, and fixed asset investment disappointed. These readings come amid uncertainty following a top-level political meeting in China, which provided few clear signals regarding further stimulus measures.
China is the world’s largest copper importer, and concerns over slowing demand due to an ongoing economic slowdown continue to weigh heavily on copper prices.
