Gold Declines as Traders Consider Odds for Later Fed Rate Cuts

(Bloomberg) — Gold declined as traders assessed the Federal Reserve’s indication that it will likely keep rates on hold for longer than originally planned.

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Bullion had remained steady early Wednesday before falling as much as 0.9% in the afternoon. The intraday turnaround isn’t uncommon for the precious metal as daily trading activity has become volatile with prices hitting a series of new peaks in recent weeks.

The precious metal is up about 15% so far this year, with gains partly driven by haven demand as geopolitical tensions in the Middle East and Ukraine continue to escalate. Long-standing supports — including robust buying by central banks and increased demand from Chinese consumers — are also underpinning prices.

Deutsche Bank raised its gold price forecast to an average of $2,400 an ounce for the fourth quarter of 2024 and to $2,600 for fourth quarter of 2025, citing a durable impact from recent investment inflow. Its strategist Michael Hsueh sees tension in the South China Sea as a potential flashpoint that could garner greater attention for gold.

Spot gold fell 0.5% to $2,370 an ounce as of 1:02 p.m. in New York, still close to its all-time high of $2,431.52 reached on Friday. The Bloomberg Dollar Spot Index dropped 0.2%. Silver and palladium rose, while platinum fell.