Gold prices rebounded today but remained on track for a weekly decline following the Federal Reserve’s latest meeting.
While the 25-basis point cut met expectations, the Fed’s more cautious outlook for interest rates in 2025 exerted downward pressure on gold prices.
Meanwhile, market participants now turn their attention to U.S. inflation data given their importance and potential impact on future policy decisions. Although a moderation in Core Personal Consumption Expenditure (PCE) inflation is anticipated, stronger-than-expected data could bolster forecasts of fewer rate cuts in 2025, intensifying the downward pressure on gold.
Adding to the bearish outlook, India, a key gold consumer, expects a significant drop in imports this December, weakening physical demand. However, escalating tensions in Europe and Middle East could spur safe-haven assets’ demand, lending some support to gold prices.
