Gold Prices Steady Amid Federal Reserve Meeting

Gold prices showed minimal movement in Asian trading on Monday, experiencing some losses from previous sessions as investors favored the dollar ahead of the Federal Reserve's final meeting of the year.

Industrial Metals Under Pressure

Copper prices faced downward pressure due to a strong dollar, with mixed economic indicators from China failing to boost demand confidence.

Last week, gold received some support from lower anticipated U.S. interest rates in the near term, but this was counterbalanced by uncertainties regarding the long-term rate outlook, which the Fed is expected to clarify this week.

Spot gold rose 0.2% to $2,653.47 an ounce, while February gold futures decreased by 0.2% to $2,671.05 an ounce as of 23:02 ET (04:02 GMT).

Gold Under Pressure as Fed Meeting Looms

Traders remain cautious regarding gold ahead of the Fed meeting. A 25 basis point rate cut is widely anticipated at the conclusion on Wednesday, reducing rates by a total of 100 bps in 2024.

The central bank's guidance on future rates will be closely monitored, particularly considering recent data indicating persistent inflation in November, along with a robust labor market.

The Fed is expected to express caution over future easing, potentially keeping rates elevated in the long term.

Higher rates negatively impact gold and other non-yielding assets by increasing the opportunity cost of investing in gold. The dollar's strengthen has pressured gold prices throughout the past week.

Despite this, analysts at ANZ remain optimistic on gold, predicting spot prices to reach $2,900 an ounce by 2025. While increases are expected to slow in the coming year, heightened economic and geopolitical risks are likely to sustain safe-haven demand.

Other precious metals also faced declines on Monday. Platinum futures dropped 0.4% to $921.75 an ounce, while silver futures fell 0.1% to $31.005 an ounce.

Copper Dips as China Data Disappoints

Benchmark copper futures in the London Metal Exchange declined 0.2% to $9,044.0 a ton, with February copper futures falling 0.4% to $4.1780 a pound.

The red metal's losses extended due to mixed data regarding China's economy. While industrial production met projections for November, retail sales growth sharply decelerated, with fixed asset investment growth falling short of expectations.

These readings came after a recent high-level political meeting in China provided few insights on plans for increased stimulus.

As the world's largest copper importer, concerns regarding slowing demand due to a weakening economy weigh heavily on copper prices.