After the U.S. Federal Reserve (Fed) lowered interest rates on December 18, gold prices dropped over 2%, reaching a one-month low. The Fed's signal to slow the pace of rate cuts supported the U.S. dollar and boosted bond yields. Spot gold fell to $2,589.91 per ounce, while U.S. gold futures dropped to $2,653.30. Fed Chairman Powell indicated that rate cuts will slow due to rising inflation, which worried gold traders, especially as upcoming inflation data is expected. With interest rates rising, gold's appeal decreased, making it more expensive for holders of other currencies. Market focus is now on upcoming U.S. GDP and inflation data.

Gold Prices Drop Hard After Fed Signals Slower Rate Cuts, Boosting Dollar and Bond Yields

Dec 19 2024