Gold steady above $2,650 as Fed decision and tensions loom

Gold traded above $2,650 per ounce on Monday as investors closely monitored the Federal Reserve's upcoming policy decision later this week, with particular focus on the central bank's monetary policy outlook for 2025.

Gold steady above $2,650 as Fed decision and tensions loom

The Fed is widely expected to implement another 25 basis point rate cut at its final meeting of the year, enhancing gold's appeal by lowering the opportunity cost of holding non-yielding assets. Additionally, ongoing geopolitical tensions in the Middle East, primarily Israel’s recent military actions in Gaza, have bolstered gold’s status as a safe-haven asset. However, despite these supportive factors, the World Gold Council has projected slower growth for the precious metal in the coming year.

Gold outlook weighed by Central Bank policies and geopolitical risks

The organization cited factors influencing this outlook, including central bank policies, geopolitical risks, and economic conditions in major markets like the U.S., China, and India, which could impact demand and price trends.