Gold prices ticked up ahead of the crucial US nonfarm payrolls report, due on Friday, which could influence the Federal Reserve’s stance on interest rates. The data, released before the Fed‘s meeting on December 17-18, will be key in determining whether the central bank proceeds with a 25 basis-point rate cut, as predicted by swaps markets. Strong labor data, however, could dissuade the Fed from aggressive rate cuts in 2025, which would likely be bearish for gold in the near term.
Analysts from ANZ Group Holdings, including Mahjabeen Zaman and Brian Martin, warned that unexpectedly strong payroll data could push gold prices below $2,600 an ounce. The precious metal was trading around $2,639 an ounce in early European trading, following a 0.7% drop on Thursday, its biggest decline since November 25. Gold has been range-bound since early last week, slipping from its record high in late October as the dollar strengthened post-Donald Trump’s election victory and geopolitical tensions eased.
Despite the pullback, gold remains up more than 25% this year, supported by US rate cuts and central bank buying. According to Macquarie Group, gold could see a new record next year, with prices potentially reaching $2,650 an ounce in the first quarter of 2025, driven by further rate cuts and continued central bank demand.
As of 7:55 a.m. in London, spot gold was up 0.3% at $2,639.10 an ounce, on track for a small weekly decline. Silver and platinum were little changed, while palladium gained 0.9%.
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