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Gold Steady as Investors Assess China's Stimulus Plans

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
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Gold Steady as Investors Assess China's Stimulus Plans

A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk
A view shows ingots of 99.99 percent pure gold in a workroom during production at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, May 23, 2024. REUTERS/Alexander Manzyuk

Gold prices held steady on Monday as investors assessed China's weekend stimulus announcement, while also focusing on US Federal Reserve officials' comments for further rate cut cues.
Spot gold was little changed at $2,657.93 per ounce by 0548 GMT. Bullion rose nearly 1% in the previous session, Reuters said.
US gold futures were flat at $2,675.00.
The potential commitment to fiscal stimulus from China suggests a healthier economy, which bodes well for gold demand but the market needs to see more concrete measures, said Tim Waterer, chief market analyst at KCM Trade.
China on Saturday said it would "significantly increase" debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package.
Investors will watch out for comments from Fed officials this week for more hints on the upcoming rate cuts, along with US retail sales data.
"If the Fed speakers this week create some further doubt over how many rate cuts could occur between now and year-end, any resulting upside in the dollar could see gold support levels around $2,600 again being tested," Waterer said.
Data on Friday showed unchanged US producer prices last month, cementing the case for quarter-point US interest-rate cuts at upcoming Fed policy meetings.
Traders see a roughly 89% chance of the Fed cutting rates by 25 basis points at its November meeting, and an 11% chance of it leaving rates unchanged.
The zero-yielding bullion is preferred in a low-interest rate environment.
The dollar index rose 0.1%, putting pressure on greenback priced-metals. A stronger dollar makes them less attractive to other currency holders.
Spot silver fell 0.4% to $31.39 per ounce and platinum shed 1% to $974.88. Both were set to snap a two-session winning streak.
Palladium extended its decline, falling 0.9% to $1,058.98.

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Gold Extends Gains into New Year as Traders Brace for Trump Policies

Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
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Gold Extends Gains into New Year as Traders Brace for Trump Policies

Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO
Ingots of 99.99 percent pure gold are placed in a workroom at the Novosibirsk precious metals refining and manufacturing plant in the Siberian city of Novosibirsk, Russia, September 15, 2023. REUTERS/Alexander Manzyuk/FILE PHOTO

Gold prices rose on Thursday, keeping up the momentum from a positive end to record-breaking 2024, as traders braced for US President-elect Donald Trump's expected policy shifts that will shape the economic and interest rate outlook for the new year.
Bullion surged over 27% last year, its biggest annual gain since 2010, as the US Federal Reserve's substantial rate cuts, robust central bank purchases and escalating geopolitical tensions boosted it to multiple record highs last year.
On the first trading session of the year, spot gold rose 0.4% to $2,634.88 per ounce, as of 0553 GMT. US gold futures edged up 0.2% to $2,646.70, Reuters said.
"Gold seems to be consolidating in a tight range, which often signals a market that's poised for a breakout. I suspect that breakout will be to the upside," said Kyle Rodda, financial market analyst at Capital.com.
Gold is likely to remain bullish in 2025, driven by geopolitical risks and expectations of rising government debt due to a deep fiscal deficit under Trump’s administration, despite potential challenges from slower Fed rate cuts and dollar strength, Rodda said.
The market will now take cues from a slew of US economic data due next week, which could influence the interest rate outlook for 2025, and Trump's tariff policies.
Donald Trump will be sworn in as president of the United States on Jan. 20.
Traders anticipate the Fed to adopt a slow and cautious approach to further rate cuts in 2025, as inflation continues to exceed its 2% target. According to the CME's FedWatch Tool, markets are pricing in just 11.2% chance of a cut in January.
Gold, which is seen as a safe investment in times of geopolitical and economic uncertainty, tends to be negatively impacted by high interest rates.
Spot silver rose 1.6% to $29.34 per ounce, palladium added 1.1% to $913.47 and platinum gained 0.9% to $918.65.
Silver ended 2024 as its best year since 2020, while platinum and palladium declined.