Gold steady ahead of holidays; Fed outlook weighs

Gold prices held steady on Tuesday, with investors bracing for a less aggressive path of interest rate cuts from the Federal Reserve next year, ahead of a shortened trading week due to the Christmas holiday.

FUNDAMENTALS

* Spot gold traded flat at $2,614.87 per ounce, as of 0050 GMT. U.S. gold futures steadied at $2,628.90.


* In a holiday-curtailed week, trading volumes are likely to thin out as the year-end approaches.

* Front and center for investors in 2025 is how rapidly or deeply the U.S. central bank cuts rates. The Fed continued reductions in December after a period of aggressive rate hikes but signalled fewer cuts in 2025.

* Higher rates dull non-yielding bullion's appeal.

* While a benign U.S. inflation reading on Friday eased some concerns about the pace of cuts next year, markets are still pricing in just about 35 basis points worth of easing for 2025.

* U.S. investors are preparing for a swathe of changes in 2025, from tariffs and deregulation to tax policy, that will ripple through markets as President-elect Donald Trump returns to the White House in January.

* Gold scaled multiple record highs this year, rising 27% so far to mark its best annual performance since 2010, driven by robust central bank buying, geopolitical tensions and monetary policy easing by major banks.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.39% to 873.95 tonnes on Monday from 877.40 tonnes on Friday.

* Spot silver added 0.1% to $29.66 per ounce, platinum rose 0.2% to $940.83 and palladium gained 0.2% to $931.36.

DATA/EVENTS (GMT) 0500 Japan Chain Store Sales YY Nov 1330 US Durable Goods Nov 1330 US New Home Sales-Units Nov.