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Gold edges down as markets eye Fed's 2025 monetary policy outlook

Gold prices edged lower as the dollar held firm on Wednesday, with financiers awaiting a key U.S. Federal Reserve choice anticipated to shape market belief and gold's trajectory by outlining the central bank's 2025 outlook.

Spot gold slipped 0.4% to $2,634.88 per ounce by 12:03 p.m. ET (1703 GMT). U.S. gold futures were down 0.4% at $2,651.20.

The Fed's 2025 financial forecasts and choice are due at 2 p.m. ET (1900 GMT), followed by Fed chair Jerome Powell's. press conference at 2:30 p.m. ET.

What markets will genuinely concentrate on is the tone set by Jerome. Powell. A hawkish stance might drive Treasury yields greater and. reinforce the dollar, putting down pressure on gold prices,. stated Ricardo Evangelista, senior analyst at ActivTrades.

On the other hand, a more mindful tone may provide some support. for bullion.

While markets are pricing in a 99% probability of a 25 basis. point rate cut during this conference, the chances of another. decrease in January stand at just 19%.

Non-yielding gold tends to do well in a low-interest-rate. environment.

Traders are also keeping an eye out for crucial U.S. GDP and inflation. information due later today that might further form expectations. around financial policy.

I do see the combination as an extension pattern within. the longer term uptrend in gold. I believe that trend will. re-exert itself in the first quarter of 2025, said Peter Grant,. vice president and senior metals strategist at Zaner Metals.

Grant highlighted that bullion remains underpinned by reducing. reserve bank policies, geopolitical tensions, sustained purchasing. by reserve banks, and increasing global political instability.

UBS echoed this belief in a note, predicting gold would. construct on its gains in 2025. The bank stressed that central. banks are likely to continue accumulating gold as they diversify. reserves, while heightened demand for hedges could drive inflows. into gold-backed exchange-traded funds (ETFs).

Spot silver fell 1.3% to $30.13 per ounce, platinum. slipped 0.8% to $930.75, while palladium decreased. 1% to $925.04.

(source: Reuters)