Gold prices fell 0.3% to $2,637.13 per ounce on December 18, 2024, as the U.S. dollar strengthened ahead of crucial Federal Reserve announcements. Investors are closely monitoring the Fed's policy direction, particularly regarding its 2025 economic outlook.
The Federal Reserve is set to release its economic projections at 2 p.m. EST, followed by a press conference with Chair Jerome Powell at 2:30 p.m. EST. Market expectations suggest a 99% probability of a 25 basis point rate cut during this meeting, although the likelihood of further cuts in January remains low at 17%.
Analysts indicate that a hawkish tone from Powell could increase Treasury yields and bolster the dollar, exerting additional downward pressure on gold prices. Conversely, a more cautious approach could provide support for gold, which typically performs well in low-interest-rate environments.
Market sentiment remains cautious as traders await key U.S. GDP and inflation data later this week that may influence future monetary policy. UBS has predicted an upward trend for gold in 2025, supported by ongoing central bank purchases and heightened demand for gold-backed exchange-traded funds (ETFs).
In related market movements, spot silver decreased 1.1% to $30.19 per ounce, while platinum and palladium also saw declines of 1.3% to $926.90 and $922.19, respectively.