Gold gains as US yields ease ahead of Fed policy meeting

Spot gold prices gained on Monday, supported by ongoing geopolitical concerns and lower US Treasury yields, as markets awaited the Federal Reserve’s policy meeting, where a third rate cut and clues on the 2025 outlook are expected.

Spot gold was up 0.3% at $2,655.39 per ounce as of 9:56 a.m. ET (1456 GMT). U.S. gold futures slipped 0.1% to $2,674.10.

A line chart titled “Spot gold price in USD per oz” that tracks the metric over time.

“I think the continuous presence of geopolitical risks are contributing to gold’s strength,” said Nitesh Shah, commodity strategist at WisdomTree.

Also, “China has resumed gold buying. So gold is reacting to a multitude of these things,” Shah noted, adding that top consumer China was likely to ramp up policy stimulus to revive its economy, which would further support gold.

On the geo-political front, Israel agreed on Sunday to double its population in the Golan Heights, citing Syrian threats despite the moderate tone of rebel leaders who ousted President Bashar al-Assad a week ago.

Bullion is considered a safe investment during economic and geopolitical turmoil, while a low-interest rate environment also makes the non-yielding bullion more attractive.

The Fed is expected to cut rates by a quarter point at its two-day meeting starting on Tuesday, while updating its outlook for 2025 and beyond.

“The economic and political background is generally supportive for gold – but the Fed may cap prices if it points to an extended pause in rate cuts after December,” said StoneX analyst Rhona O’Connell.

US 10-year Treasury yields dipped 0.2%, further supporting bullion.

Citi projects strong gold and silver demand until U.S. interest rates stabilize, forecasting a peak for both metals in late 2025 to early 2026.

Key data releases this week, including U.S. GDP and inflation figures, could further influence market sentiment.

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Spot silver rose 0.31 to $30.58 per ounce, platinum gained 1.6% to $939.20, while palladium was down 0.2% at $950.47.