Gold prices stabilized after a two-day rise, with the precious metal trading near $2,660 per ounce.
This stability came after achieving a gain of 0.5% on Wednesday, supported by a report showing a slowdown in employment and wage growth in the US private sector during December.
The Fed must balance this slowdown with renewed concerns about inflation when making decisions on lowering interest rates. Minutes from the central bank’s meeting last month showed a more cautious approach to easing monetary policy.
Low borrowing costs are usually a positive for gold, which does not offer interest. Traders are now turning their attention to December wages data, expected on Friday, which is expected to show a moderate slowdown, with continued strong growth in the labor market that economists expect to continue into 2025.
Gold achieved a 27% rise last year in a record wave driven in part by the easing of US monetary policy. However, the metal lost this momentum after Donald Trump’s victory in the US elections, which supported the dollar.
Investors now face the prospect of smaller gains this year, as Goldman Sachs Group slowed its target for gold to reach $3,000 an ounce to mid-2026, due to expectations of limited interest rate cuts by the Federal Reserve.
By 8:14 am Singapore time, spot gold was down 0.1% to $2,660.57 per ounce. While the Bloomberg Dollar Index stabilized. Silver and palladium did not record significant changes, while platinum decreased slightly.
Last updated: January 9, 2025 – 12:30
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