Investing.com – Gold prices were largely unchanged in Asian trading on Tuesday amid thin year-end trading, although they were on track for stellar annual gains, helped by the US Federal Reserve’s interest rate cuts this year.
remained largely unchanged at $2,607.65 per ounce, while the February expiration fell 0.2% to $2,620.22 per ounce at 00:23 ET (05:23 GMT).
Gold trading typically sees thin volumes and subdued prices towards the end of the year as many institutional traders and market participants close their books before the holidays.
Gold poised for big annual gains
The yellow metal is up more than 26% in 2024 on the back of the Fed’s excessive rate cuts earlier this year and geopolitical tensions around the world.
When interest rates are low, the opportunity cost of holding gold decreases compared to interest-bearing assets such as bonds or savings accounts. As a result, investors typically allocate more capital to gold as a store of value and protection against uncertainty.
While gold prices rose for most of the year, the December Fed meeting acted as a boost after fewer rate cuts were announced in the coming year.
Policymakers forecast only two more rate cuts in 2025, while the costly expectation of four rate cuts remained a major concern.
Gold prices fell sharply after the Fed meeting and have seen moderate moves since then, reflecting a cautious outlook for next year.
With fewer interest rate cuts expected, the dollar has continued to appreciate, putting pressure on gold.
A stronger dollar weighs on gold prices as it makes the yellow metal more expensive for buyers using other currencies.
Other precious metals fell slowly on Tuesday. fell 0.4% to $913.65 per ounce, while it fell 0.3% to $29.315 per ounce.
Copper is weakening even as Chinese factory activity grows
Among industrial metals, copper prices remained subdued due to the strong dollar.
The price was slightly weaker in Asian trading on Tuesday, but remained near the two-year high it reached earlier this month.
Data on Tuesday showed China’s economy grew for a third straight month in December as a raft of new stimulus measures continued to provide support.
However, the increase was slightly lower than market expectations and lower than that of the previous month.
The benchmark on the London Metal Exchange fell 0.2% lower to $8,925.50 per tonne, while February was largely unchanged at $4.0885 per pound.
