Investing.com – Gold prices were little moved on Monday as traders cautiously awaited the Federal Reserve’s final policy meeting of the year as it has the potential to move the high-demand dollar.
At 09:15 ET (15:15 GMT), the price rose 0.2% to $2,652.99 per ounce, while the February term fell 0.1% to $2,671.89 per ounce.
In industrial metals, copper prices were also under pressure from a strong dollar, with mixed economic data from China doing little to inspire confidence in demand.
Gold saw some bidding last week on the prospect of lower US interest rates in the near term. But this was offset by uncertainty about the long-term outlook for interest rates, which the Fed is likely to elaborate on this week.
Gold under pressure as Fed meeting looms
Traders remained wary of the yellow metal ahead of this week’s Fed meeting. The central bank is widely expected to cut rates by 25 basis points at the end of Wednesday’s meeting, bringing rates down by a total of 100 basis points in 2024.
But the central bank’s interest rate outlook will be closely watched, especially in light of recent data showing inflation firmed in November while the labor market remained strong.
The Fed is expected to be more cautious about future easing, which could keep interest rates high in the long term.
High interest rates do not bode well for gold and other non-yielding assets as they increase the opportunity cost of investing in the yellow metal. The dollar confirmed this idea and put pressure on the gold price last week.
Still, ANZ analysts say they remain bullish on gold, predicting spot prices will hit $2,900 an ounce by 2025. While earnings are expected to moderate in the coming year, major economic and geopolitical risks are still expected to keep demand for safe havens in play.
Other precious metals edged higher on Monday. rose 2.2% to $944.50 per ounce, while the price rose 0.1% to $31.043 per ounce.
Copper struggles for direction after Chinese data
The benchmark on the London Metal Exchange rose 0.1% to $9,072.0 per tonne, while February fell 0.2% to $4.1907 per pound.
The red metal struggled for direction after Monday’s data painted a mixed picture of the Chinese economy. Although growth in November grew as expected, growth slowed sharply while growth disappointed.
The readings came as a recent political meeting at the country’s highest level provided few clues about Beijing’s plans for more stimulus.
China is the world’s largest copper importer, with concerns about slowing demand, in a context of a weakening economy, putting major pressure on copper prices.
(Ambar Warrick contributed to this article.)
