Gold prices in Asian trade remained unchanged, despite the US Federal Reserve’s interest rate cuts this year. Spot Gold was at $2,607.65 per ounce, while Gold Futures expiring in February edged 0.2% lower to $2,620.22 an ounce.
Gold prices have risen more than 26% in 2024 due to the Fed’s outsized rate cuts earlier this year and geopolitical tensions. When interest rates are low, the opportunity cost of holding gold decreases compared to interest-bearing assets, causing investors to allocate more capital to gold as a store of value and a hedge against uncertainty.
The Fed’s December meeting signaled fewer rate cuts in 2025, but gold prices had fallen sharply after then, reflecting a cautious outlook for next year. The dollar has strengthened further, creating pressure on gold prices, and making the yellow metal more expensive for buyers using other currencies.
Other precious metals inched lower on Tuesday, with Platinum and Silver Futures inching lower. The US Dollar Index remained near a two-year high in Asian trade.
