Spot Gold recouped a part of the loss from the prior trading day on Thursday, with a likely technical correction being underway. The 4-hour RSI indicated oversold conditions for the precious metal in late Wednesday trade.
The yellow metal lost over 2% yesterday, plunging as low as $2,583.91 per troy ounce, after the Federal Reserve signaled fewer rate cuts in 2025 due to robust GDP growth and persistent inflation.
The central bank’s dot plot projections showed just two interest rate cuts next year, totaling 50 basis points. That compares with 100 basis points of rate cuts projected in the third quarter.
The Fed reduced its federal funds rate target range by 25 basis points to 4.25%-4.50% at its December meeting, in line with market consensus.
A more restrained monetary easing reduces the appeal of Gold, which pays no interest.
The Federal Reserve revised up its 2024 GDP growth forecast to 2.5% from 2% in the September projection. And, the 2025 forecast was raised to 2.1% from 2% previously.
In addition, annual core PCE inflation forecasts were also revised up, as follows:
– for 2024 – to 2.8% from 2.6%;
– for 2025 – to 2.5% from 2.2%;
– for 2026 – to 2.2% from 2% in the September projection.
Up next, market players are now expecting the US GDP and PCE inflation reports this week for more clues on the Fed’s monetary policy trajectory.
Spot Gold was last gaining 1.33% to trade at $2,619.88 per troy ounce.
Gold Futures for delivery in February were losing 0.71% on the day to trade at $2,634.51 per troy ounce.
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