Gold ends in red on concerns about Fed's rate cuts likely to slow

Gold bars

Gold prices finished in the red today, Dec. 16, as investors assessed data that revealed an expansion in US economic activity, which may prompt the Federal Reserve to cautiously weigh indicators before moving forward with a rate cut.

February gold futures plummeted by 0.2%, or $5.8, to close at $2,670 per ounce.

Despite the decline in the yellow metal, many analysts still believe that the current environment is supportive of the precious metal, as Ronna O'Connell, an analyst at StoneX, said that the current economic and political backdrop is generally supportive of gold.

However, the Federal Reserve may limit the price increase if it indicates a halt to interest rate cuts after December, according to O'Connell.

Citigroup expects strong demand for gold and silver until US interest rates stabilize. Peak demand for the metals in the period extending from late 2025 to early 2026 is also in the cards, Reuters reported.

Today's losses came despite the US dollar index, which gauges the greenback's strength against a basket of six currencies, falling by 0.15% to 106.84 points at 10:45 pm Makkah time.

Standard & Poor's Global data showed that the composite purchasing managers' index rose to 56.6 points in December, reaching its highest level in 33 months. It was supported by an uptick in the services sector sub-index to its highest level in 38 months.