Gold prices go down big on weekly basis ahead of Christmas 2024 holidays

Gold prices were down 1.6 per cent so far this week, the most in three weeks, even though gold rates gained on Friday as the dollar pulled back from highs ahead of the U.S. Personal Consumption Expenditure data announcement. This comes ahead of Christmas 2024 festivities across the US.

Spot gold was up 0.5 per cent at $2,605.41 per ounce, and the US gold futures rose 0.4 per cent higher to $2,619.40 although the US Federal Reserve's hawkish interest rate outlook set bullion on track for a weekly loss.

Bullion has fallen about 1.6 per cent this week so far, after the US central bank on Wednesday projected two 25-bps rate cuts by the end of 2025, which is half a percentage point less in policy easing than officials had expected in September.


"The recent correction in the gold market is related to the Fed meeting, where more 'hawkish' sentiments were voiced than expected," said Julia Khandoshko, CEO at European broker Mind Money.

Higher interest rates increase the opportunity cost of holding gold, which does not yield any interest.

"If the Fed only delivers two rate cuts in 2025 we would likely need to moderate our expectations for gold demand from exchange traded funds (ETFs), which could reduce the upside we still expect in bullion prices," UBS said in a note.

Gold started 2024 at $2,000 per ounce and is on track to end the year about 25 per cent higher, signaling optimism in the market and making the $3,000 level achievable in only a matter of time, Khandoshko said.

FAQs

Q1. What are prices of Silver?
A1. Spot silver fell 0.4 per cent to $28.91 per ounce but was headed for its worst week since December 2023.

Q2. What are prices of Platinum and palladium?
A2. Platinum dipped 0.3 per cent at $920.94 and palladium fell 0.3 per cent to $903.25. Both the metals were poised for weekly losses.