(Bloomberg) — Gold held a decline as comments from Federal Reserve officials over the weekend reinforced the view the US central bank will take a more cautious approach to cutting interest rates this year.
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Bullion traded near $2,640 an ounce after San Francisco Fed President Mary Daly and Fed Governor Adriana Kugler emphasized the need to finish off the fight against inflation and reach the authority’s 2% target. Lower rates tend to benefit gold, as it doesn’t pay interest.
The Fed last month reined in the number of rate cuts it expects to make in 2025, as Chair Jerome Powell signaled greater caution over how quickly policymakers can continue reducing borrowing costs. That may be a headwind for the precious metal after it surged 27% last year in a record-breaking run that was propelled in part by US monetary easing.
Spot gold was steady at $2,639.46 an ounce as of 8:29 a.m. in Singapore, after dropping 0.7% on Friday. The Bloomberg Dollar Spot Index rose 0.1%. Silver was flat, while palladium and platinum slipped.
A raft of data this week — including nonfarm payrolls and job openings — will be closely watched for a steer on the Fed’s easing trajectory as Donald Trump prepares to return to the White House this month. Minutes of the Fed’s December meeting are also due this week.
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