Market comments on behalf of Terence Hove Financial Markets Strategist Consultant to Exness
Gold prices declined for a second consecutive day as the asset continues to see pressure from rebounding Treasury yields and a strong US dollar as market participants await next week’s Federal Reserve monetary policy meeting.
While markets expect a 25-basis-point rate cut in December, inflation data has raised concerns about a potential Federal Reserve pause in early 2025, especially as progress toward the 2% inflation target appears stalled.
Recent dovish measures by other major central banks, including rate cuts from the Swiss National Bank, European Central Bank, and Bank of Canada, along with the Bank of Japan’s stance to maintain current rates, have had little immediate impact on gold prices ahead of the Fed meeting. However, these policy shifts could influence gold’s performance in the longer term.
Despite current pressures, gold is supported by ongoing geopolitical tensions in Eastern Europe and unrest in the Middle East, as well as concerns over the U.S. President-elect Donald Trump’s proposed tariff plans. Additionally, strong central bank demand could persist through 2025, providing substantial medium-term support.