Gold prices hold steady ahead of key Federal Reserve interest rate decision

Gold prices remained steady as investors awaited the Federal Reserve's final interest rate decision of the year, with all eyes on the monetary policy outlook for 2024 and beyond.

The precious metal held firm around $2,647 per ounce, following a modest 0.2% dip in the previous session. Investors are keenly watching the U.S. central bank's meeting on Wednesday, where another quarter-point rate cut is widely expected. However, the policy trajectory for 2025 is uncertain, with potential changes under the incoming Donald Trump administration that could complicate further rate cuts.

Fed’s statement and economic forecasts in focus

Traders are focused on the Federal Reserve’s post-meeting statement, expecting clearer guidance on the future interest rate path. Updated economic projections will also provide insights into the Fed’s outlook on inflation, growth, and employment. Traditionally, lower interest rates support gold prices as the metal becomes more attractive in a low-yield environment.

Traders look to economic data for 2025 clues

In addition to the Fed meeting, key U.S. economic data, including GDP growth figures and the core Personal Consumption Expenditures (PCE) Price Index — the Fed's preferred inflation gauge — will be closely watched for signs of economic momentum heading into 2025.

Global gold market trends

Gold prices have surged more than 28% this year, on track for their largest annual gain since 2010. The rally has been driven by a mix of U.S. monetary easing, strong demand for safe-haven assets, and record central bank purchases globally.

India, one of the world’s largest gold markets, imported a record amount of gold in November after the government lowered import duties. Annual demand is expected to rise by 7% in 2024, reaching 905 tons, the second-highest level since 2015, according to a report by Metals Focus. However, high gold prices may dampen consumption in 2025, with demand forecasted to decline by 4%, the report added.

Market snapshot

As of 8:24 a.m. in Singapore, spot gold prices were steady at $2,647.06 per ounce. The Bloomberg Dollar Spot Index remained unchanged, while prices for silver, platinum, and palladium also held steady.