Gold eases as US dollar, yields rise in thin holiday trading

Gold prices edged lower in a subdued holiday-season trading on Monday, weighed down by a robust dollar and high US Treasury yields as investors awaited clearer signals on the Federal Reserve’s monetary policy for 2025.

Spot gold was down 0.3 per cent at $2,612.58 per ounce, as of 1505 GMT. US gold futures eased 0.7 per cent to $2,627.60.

The dollar index was up 0.6 per cent against its rivals, hovering around an over two-year high, reducing gold’s appeal for holders of other currencies, while the benchmark U.S. 10-year yield also gained.

“The market continues to digest the results of the Federal Open Market Committee (FOMC) meeting last week. A shallower rate path for 2025 is now getting factored in, probably a pause in January, maybe March as well,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.

Despite the Fed’s 25-basis-point rate cut last week, its signal of fewer rate reductions in 2025 sent gold to its lowest levels since mid-November last week.

While non-yielding gold benefits in low-interest-rate environments, investors are recalibrating expectations for next year.

Spot silver was steady at $29.52 per ounce and platinum climbed 1.4 per cent to $939.05 while palladium gained 0.8 per cent to $927.74.