Gold prices steady ahead of US Fed meet; key factors to watch for 2025 outlook

Gold prices held steady on Tuesday, with spot gold inching up by 0.1 per cent to USD 2,655 per ounce, as traders awaited the US Federal Reserve’s policy meeting on December 18. While the Fed is expected to announce a 25-basis-point rate cut, the market’s real focus is on the central bank's broader outlook for 2025.

Fed's rate decision and future outlook

Analysts expect the Fed to maintain a dovish stance to support the economy, but investors will closely watch the dot plot and Chair Jerome Powell’s commentary. 

The CME FedWatch tool indicates a 96 per cent probability of a rate cut this week but a much lower chance—just 16 per cent—of a similar reduction in January 2025.

Global monetary policy and geopolitical tensions

Gold’s safe-haven appeal is further supported by global uncertainties. Central banks, including the Bank of Japan and European Central Bank, are preparing for their policy decisions, which could sway market sentiment. Additionally, escalating US sanctions on North Korea and Russia may add volatility, further boosting gold’s attractiveness.

India gold prices and China’s role

In India, the price of 24-carat gold stood at Rs 77,030 per 10 grams on December 17, while 22-carat gold was priced at Rs 70,611. 

Investment opportunities and risks

While gold hovers near its highs, Trivedi suggested a technical correction may present a buying opportunity. For investors, gold remains a hedge against inflation and global risk, with analysts expecting support around USD 2,600 per ounce or Rs 76,900 per 10 grams.

The Fed's commentary this week will likely decide whether gold sustains its current bullish momentum or undergoes a short-term pullback.