Gold Prices Rise Ahead of Fed Meeting

Gold prices increased on Friday, with spot gold rising by 0.3% to $2,688.29 per ounce and poised for a weekly gain of over 2%, largely driven by renewed purchases from China and expectations of a 25-basis-point rate cut by the U.S. Federal Reserve at its upcoming meeting on December 17-18. Analysts predict that while the rate cut may lead to initial selling pressure, overall sentiment remains bullish due to gold's appeal in low-interest-rate environments. This week’s inflation data, showing the largest rise in U.S. consumer prices in seven months, has further solidified expectations for monetary easing. Additionally, central banks like the European Central Bank and the Swiss National Bank have also reduced interest rates, creating favorable conditions for gold. However, profit-taking led to a brief drop in gold prices earlier in the week after reaching a five-week high. Market participants are closely monitoring both the Federal Reserve's decisions and continued demand from China amidst ongoing geopolitical uncertainties.