Gold retreats as traders see slower Fed rate cuts in 2025

Gold slipped on Tuesday under pressure from a strengthening US Dollar (USD) and climbing Treasury yields as investors focused on the Federal Reserve’s final policy meeting of the year with growing expectations of a gradual pace of rate cuts in 2025.

Spot gold was down 0.6% at $2,636.89 per ounce, as of 9:18 a.m. ET (1418 GMT). U.S. gold futures shed 0.7% to $2,650.50.

The dollar rose 0.1%, making gold pricier for holders of other currencies, while U.S. 10-year Treasury yields hit a four-week high ahead of the Fed’s meeting, where a 25 basis-point rate cut is widely expected on Wednesday.

Attention is also on the Fed’s updated economic projections and the dot plot, which could reshape expectations for the rate trajectory through 2025 and 2026.

“So the question is, if the Fed going to be more hawkish or more dovish than what the markets are expecting right now. Because of Trump’s agenda, people are expecting the Fed to be more cautious in terms of being open to further rate cuts at this stage,” said Fawad Razaqzada, market analyst at Forex.com.

According to CME’s FedWatch tool, the odds of a 25-basis-point rate cut this week stand at 97%, but the chances of a reduction in January are just around 17%.

Gold Rates Today in Pakistan

“Heading into the Fed meeting, risks for gold are actually tilted to the downside,” said Zain Vawda, market analyst at MarketPulse by OANDA.

Bullion generally thrives in a low-interest rate environment.

Meanwhile, U.S. retail sales increased more than expected in November, adding to warmer inflation readings in recent months and suggesting that the Fed could pause rate cuts in January.

Traders are also eyeing key U.S. GDP and inflation data later this week for further cues.
In other metals, spot silver was down 0.7% to $30.30 per ounce, platinum shed 0.3% to $932.93, and palladium fell 1.5% to $932.75.