Spot gold prices unchanged with Fed rate decision in focus

REUTERS: International gold prices were steady on Tuesday as investors took a cautious stance ahead of the upcoming US economic data that could provide insights into the Federal Reserve’s interest rate path.

Spot gold was nearly unchanged at $2,638.73 per ounce, as of 0501 GMT, after falling as much as 1 per cent on Monday. US gold futures was 0.1 per cent up at $2,661.10.

Key US data this week includes the job openings due later in the day, the ADP employment report on Wednesday and the payrolls report on Friday.

“The next big thing is going to be the payrolls on Friday night because it’ll tell us whether the Fed is essentially going to green-light the interest rate cut in a couple of weeks,” said Kyle Rodda, financial market analyst at Capital.com.

Fed Governor Christopher Waller on Monday said with inflation still forecast to fall to 2 per cent, he is inclined “at present” to support another rate cut later this month.

The comments boosted expectations of a rate cut at the Fed’s December 17-18 meeting to nearly 75 per cent.

“I expect it will be appropriate to continue to move to a more neutral policy setting over time,” Fed Bank of New York President John Williams said.

“It seems we’re just oscillating in one place until a new trigger emerges,” said Ilya Spivak, head of global macro at Tastylive.

“Another 25-basis-points cut this month seems likely and appears mostly priced in. The big question concerns the scope for further easing in 2025.”

Gold tends to thrive in a low-interest-rate environment and during periods of geopolitical turmoil.

On the geopolitical front, the Israeli military targeted dozens of Hezbollah positions across Lebanon on Monday.

Elsewhere, spot silver added 0.2 per cent to $30.55 per ounce, platinum dropped 0.4 per cent to $942.80 and palladium shed 0.6 per cent to $975.74.

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