Gold prices steadied in Asian trade on Friday after experiencing significant losses in the previous session due to a strong dollar, with markets eyeing next week’s Federal Reserve meeting. Despite this, the precious metal maintained most of its gains for the week, supported by safe-haven demand stemming from geopolitical tensions in the Middle East and Asia.

Gold was trading at $2,687.44 an ounce, while futures expiring in February remained flat at $2,709.51 an ounce. Spot prices were up over 2% for the week.

Gold pressured by dollar strength as Fed meeting looms

Gold saw some of its gains diminish this week as the dollar strengthened ahead of the upcoming Fed meeting. While a rate cut by the central bank is expected, uncertainty looms over its future rate plans, especially with recent data showing persistent U.S. inflation.

The Fed is anticipated to reduce rates at a slower pace in 2025 after cutting rates by 75 bps in 2024. The policies of incoming President Donald Trump are also expected to keep rates elevated in the long term, which could pressure metal prices due to increased opportunity costs for non-yielding assets.

Aside from the Fed meeting, markets will be closely watching interest rate decisions in Japan and England next week. Other precious metals, such as silver and platinum, also experienced declines on Friday.

Copper prices fall as China CEWC underwhelms

Copper prices extended their decline on Friday following lackluster signals on stimulus from a key economic conference in China. Despite high expectations, the China’s Central Economic Work Conference did not provide additional details on stimulus plans, disappointing traders.

Benchmark copper on the London Metal Exchange was stable at $9,093.50 a ton, while February futures fell 0.4% to $4.2270 a pound.

Overall, the market sentiment remains cautious as investors await further clarity on central bank policies and economic stimulus measures in key economies.

Analysis: The article discusses the current trends in gold and copper prices, highlighting the impact of a strong dollar and upcoming Federal Reserve meeting on gold prices. It also touches on the disappointment surrounding stimulus signals from China’s economic conference and its effects on copper prices. For investors, it is important to monitor central bank decisions and geopolitical developments to make informed decisions about their investments in precious metals and industrial commodities.

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