Gold prices dropped due to anticipation of rate cuts, impacting market sentiment.

From Investing.com: 2024-12-18 02:02:00

Gold prices dropped by 1.23% as investors anticipate gradual rate cuts by the Fed in 2025. The US retail sales report showed a 0.7% increase in November, potentially halting rate cuts in January. The focus is on the Fed’s interest rate decision later today, with traders looking for clues on future policy direction. A Reuters analyst suggests spot gold may retest support at $2,633 per ounce.

The euro weakened by 0.2% against the USD following better-than-expected US retail sales data. Investors expect fewer rate cuts from the Fed in 2025 due to strong economic momentum. The ECB hints at more rate cuts, leading to bearish pressure on EUR/USD. Focus remains on the Fed’s interest rate decision and updated economic projections today.

The yen declined ahead of the Fed and BOJ interest rate decisions. The BOJ is expected to maintain its policy rate while the Fed is likely to reduce rates by 25 basis points. The BOJ may consider raising interest rates in January if wage-price dynamics remain positive. Market participants await the Fed’s decision today and the BOJ’s decision on Thursday.



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