#Gold Dips Below #YSD 2,700 as Traders Eye #Fed's Rate Decision! #GC1! #XAU #Fed #PreciousMetalsCommodities

#Gold #GC1! #XAU prices declined after experiencing their largest surge in 20 months last week, with traders disregarding a weaker #US dollar #USD and shifting their focus to the Federal Reserve's #FED upcoming interest-rate decision.

Bullion #GC1! ?fell by nearly 2% to drop below #USD 2,700 an ounce, despite a decrease in the #US currency, which typically supports the commodity. Investors are now concentrating on the monetary policy outlook, following a report indicating #US business activity expanding at its fastest rate since April 2022. Swaps traders see a less-than-even probability that the central bank will reduce rates next month. Higher borrowing costs generally pressure gold #Gold #GC1! #XAU, as it doesn't #yield interest. The precious metal has still appreciated by over a quarter this year, bolstered by central bank purchases and the #Fed's pivot towards rate cuts. Safe-haven buying has also been a factor, with prices climbing 6% last week due to an escalation in the Russia-Ukraine conflict. Most banks remain optimistic about the outlook, with Goldman Sachs Group Inc. and UBS Group AG anticipating further gains in 2025.

"Prices continue to reflect the interplay between geopolitical risks and a less dovish outlook from the Federal Reserve #FED," said a market strategist with IG Asia Pte. "Any upside inflation surprises could further sway bets towards a potential rate hold in December, with any prospects of a slower pace of rate cuts likely to offer some resistance for gold #Gold #GC1! #XAU prices."

A series of economic data releases this week may provide insights into the #Fed's likely rate trajectory. These include minutes from the central bank's November meeting, consumer confidence, and personal consumption expenditure data — the monetary authority's preferred inflation gauge.

Monday's 25 November dollar #USD decline — accompanied by a drop in #US bond #yields — followed #US President-elect Donald Trump's nomination of Scott Bessent to oversee the Treasury. Investors expect the hedge fund manager to prioritize economic and market stability over more radical measures.

Spot gold #GC1! retreated 1.6% to #USD 2,673.94 an ounce as of 12:02 p.m. in Singapore, falling alongside silver #SI, platinum #PL, and palladium #PA. The Bloomberg Dollar Spot Index #BBGDXY declined 0.5%.

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