Gold prices steady amid thin year-end trading, strong dollar creates pressure

Investing.com– Gold prices were largely unchanged in Asian trade on Friday amid thin year-end trading, although they were set to edge higher this week amid a cautious outlook following the U.S. Federal Reserve’s hawkish tilt.

Spot Gold was largely unchanged at $2,633.40 per ounce, while Gold Futures expiring in February edged 0.2% lower to $2,649.91 an ounce by 00:20 ET (05:20 GMT).

Trading in gold typically sees thin volumes and subdued prices toward the year-end as many institutional traders and market participants close their books ahead of the holiday season.

Additionally, at year-end, economic data releases and major policy decisions are typically fewer, reducing catalysts for significant price volatility.

The yellow metal was set to edge up 0.3% for the week after losing more than 1% in the previous one. A strong dollar after the Fed’s hawkish shift last week has continued to put downward pressure on bullion. Gold under pressure from strong Dollar

The US Dollar Index was slightly higher in Asian trade on Friday and hovered near a two-year high it touched last week.

A stronger dollar often weighs on gold prices as it makes the yellow metal more expensive for buyers using other currencies.

Gold prices had fallen sharply after the Fed policy meeting indicated only two more rate cuts in 2025, against previous expectations of four.

Higher interest rates put downward pressure on gold making it more attractive compared to interest-bearing assets like bonds

Other precious metals were also muted on Friday. Platinum Futures were unchanged at $954.50 an ounce, while Silver Futures were steady at $30.380 an ounce. Copper gains on concentrate shortage news, strong dollar caps gains

Among industrial metals, copper prices were higher after a Reuters report showed China's leading copper smelters have set lower processing charge guidance for the first quarter of 2025 compared to this quarter, reflecting an ongoing shortage of copper concentrates.

At a meeting in Shanghai, representatives from the China Smelters Purchase Team agreed on new rates for copper concentrate treatment and refining charges, setting them at $25 per metric ton and 2.5 cents per pound, down 28.6% from the fourth-quarter guidance of $35 per ton and 3.5 cents per pound.

The red metal failed to fully capitalize on this news, as a strong dollar weighed.

Benchmark Copper Futures  on the London Metal Exchange rose 0.5% to $9,008.50 a ton, while February Copper Futures  edged down 0.1% to $4.1360 a pound.

Source: Investing.com