Gold price today: Stabilizing above $4200 ahead of the crucial Fed decision
The price of gold stabilized above $4,200 per ounce on Monday, after limited declines last week, as investors await the US Federal Reserve's decision on interest rates at its last meeting of the year.
The impact of the Fed meeting on gold prices
This week's Federal Reserve meeting is one of the most important events affecting global markets, with analysts widely expecting the US central bank to announce the first interest rate cut in the current monetary easing cycle.
This expectation is supported by mixed US economic data, especially in the labor market, and the stability of the core inflation rate at expected levels.
Market expectations: Strong likelihood of a rate cut
Current market interest rates indicate:
- 87% probability of a 25-basis point rate cut this week.
- Expectations of two more cuts over the next year 2025.
- Investors focus on the Fed's updated economic outlook through 2026.
Additional factors shaping gold this week
The JOLTS job openings report will be released on Tuesday, the last important reading on the US labor market before the Fed announcement, giving it a multiplier effect on market sentiment.
China's continued support for gold
On the other hand, China's central bank continues its policy of boosting gold reserves, adding to its reserves for the thirteenth consecutive month, bringing its total holdings to 74.12 million ounces of gold.
This continued institutional buying is one of the main pillars supporting gold prices in the long term.
A crucial week for precious metals
This week is a crucial one for the global gold market, as several influential factors converge:
-The Fed's monetary decision and expectations of easing.
- The latest economic data from the US labor market.
- Continued institutional demand from central banks.
- Geopolitical developments between Russia and Ukraine.
All these factors suggest that gold may maintain its positive momentum in the medium term, especially as global monetary policy shifts towards a more accommodative phase, reducing the chances of higher yields on gold-competing bonds and supporting the investment appeal of the yellow metal as a safe haven and inflation hedge.
