Gold slides as traders weigh prospects for Fed rate cuts

(Bloomberg) — Gold slipped as the dollar rose and traders weighed the outlook for U.S. monetary policy in 2025.

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Gold prices fell as much as 0.6% as the greenback gained after the U.S. government averted a shutdown. Investors also digested the latest consumer confidence data as well as the latest numbers on the Federal Reserve’s preferred indicator of underlying inflation for November.

The Conference Board’s confidence indicator unexpectedly fell in December for the first time in three months on economic concerns amid uncertainty over Trump administration policies, data released Monday showed. The Fed’s preferred measure of underlying price pressures, released last Friday, came in subdued, a step in the right direction for policymakers looking to further reduce borrowing costs next year.

Lower interest rates usually have a positive impact on gold because it doesn’t pay interest.

The precious metal has risen more than 25% this year and has repeatedly hit record highs, helped by U.S. monetary easing, safe-haven demand and purchases by the world’s central banks. However, the rally faded after the election of Donald Trump, giving the dollar a boost. A stronger greenback makes commodities valued in that currency more expensive for most buyers.

Spot gold fell 0.3% to $2,615.54 an ounce at 11:50 a.m. in New York, after falling 1% last week. The Bloomberg Dollar Spot Index rose 0.3%. Platinum, palladium and silver were all higher.

– With support from Preeti Soni and Jack Ryan.

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