Gold holds steady as traders e​ye U.S. monetary policy outlook

Gold prices held firm as traders assessed the outlook for U.S. monetary policy following last week’s surprisingly low reading of the Federal Reserve’s preferred inflation gauge.

The precious metal traded around $2,620 per ounce in subdued market conditions, building on a 1.1% gain from the previous week.

This increase was driven by the release of November’s core Personal Consumption Expenditures (PCE) Price Index, which indicated stable inflation—a favorable signal for policymakers considering further interest rate cuts in 2025.

Lower interest rates tend to benefit gold, as the metal offers no fixed income and gains appeal in low-yield environments.

Gold has surged by 27% this year, reaching record highs due to a combination of U.S. monetary easing, strong safe-haven demand, and significant central bank bullion purchases worldwide.

However, the rally has slowed since Donald Trump’s election as U.S. president, which has strengthened the dollar. A stronger dollar increases the cost of dollar-denominated commodities for international buyers, potentially dampening demand.

As of 9:12 a.m. Singapore time, spot gold showed minimal movement, trading at $2,620.2 per ounce after a 1% decline last week.

Other precious metals saw mixed movements: platinum edged higher, while silver and palladium remained steady. Meanwhile, the Bloomberg Dollar Spot Index stayed unchanged after a 0.6% weekly gain.