WASHINGTON (dpa-AFX) - Gold traded lower on Friday and the U.S. dollar was set for a big annual gain after the Federal Reserve advocated cautious rate cuts in 2025.
Spot gold dipped 0.3 percent to $2,626.69 per ounce while U.S. gold futures were down half a percent at $2,641.19.
The dollar headed towards an almost 7 percent annual gain as recent data signaled a resilient U.S. economy.
Federal Reserve Chair Jerome Powell said earlier this month that more reductions in borrowing costs now hinge on further progress in lowering stubbornly high inflation, prompting traders to dial back estimates of how far borrowing costs are likely to fall over the coming year.
Traders are currently pricing in 37 bps of Fed rate cuts in 2025, with no reduction fully priced into money markets until June.
Market participants are also bracing for sweeping economic changes under a Trump administration.
U.S. President-elect Donald Trump has proposed deregulation, tax cuts, tariff hikes and tighter immigration policies that economists view as both pro-growth and inflationary.
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