(Bloomberg) — Gold fell along with most commodity and stock markets as traders face a rush of interest rate decisions from major central banks, including the U.S. Federal Reserve.
Most read from Bloomberg
Bullion was trading around $2,640 an ounce after posting modest gains in the previous session as investors analyzed mixed U.S. data. Activity at U.S. service providers grew at the fastest pace since October 2021, while some factory activity in New York state retreated.
The Fed will make its final policy decision of the year on Wednesday, followed by announcements in Japan and Britain this week. Interest rate swaps have almost fully priced in a quarter-point cut in the U.S., and traders will focus on policymakers’ language for clues about the outlook for 2025. Lower interest rates are generally a positive for gold, which pays no interest.
The precious metal is up more than 28% this year, putting it on track for its biggest annual gain since 2010. Its strength is supported by easing in the US, safe-haven demand and continued buying by the world’s central banks . The value of India’s gold imports rose to a record in November after the government cut customs duties.
“Gold is in a bit of a Goldilocks situation,” Max Layton, global head of commodity research at Citigroup Inc., said in an interview on Bloomberg TV. Layton said that regardless of whether inflation remains higher or lower than expected, gold would benefit from both a downturn in the U.S. economy and lower interest rates.
Spot gold fell 0.3% to $2,644.03 an ounce at 3:59 p.m. in New York. The Bloomberg Dollar Spot Index rose 0.1%, while silver and palladium were lower.
–With help from Preeti Soni and Yvonne Yue Li.
Most read from Bloomberg Businessweek
©2024 BloombergLP
