Gold edged higher as traders weighed a slower pace of Federal Reserve rate cuts in 2025.
Bullion hovered near $2,620 an ounce after slipping 0.4% on Monday. Investor sentiment remains cautious following weaker-than-expected US consumer confidence data in December, partly linked to uncertainties surrounding the incoming Trump administration.
Thin holiday trading has steadied gold prices, though a stronger dollar continues to exert pressure, noted Pranav Mer, an analyst at JM Financial Services.
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The Fed recently signaled fewer rate cuts for 2025, with Chair Jerome Powell emphasizing the need for further declines in inflation. Lower rates generally benefit gold, which offers no yield.
Gold has surged over 25% this year, fueled by monetary easing, safe-haven demand, and central bank purchases. However, the rally has moderated as the dollar strengthened post-election.
Spot gold rose 0.2% to $2,618.93 an ounce in London. Silver and palladium also gained, while platinum slipped.
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