Gold pared some of its losses over the weekend following the Federal Reserve's (Fed) decision to adopt a gradual stance with a more modest 2025 interest rate cut forecast.
At 9.40 am, gold prices were at $2,601.21, up 0.26% since it opened in early trading on Friday in the Asian session.
US economic data released on Thursday saw a drop in the number of US citizens due to unemployment and US GDP growing by 3.1% in the third quarter of 2024 compared to forecasts for a stable reading of 2.8%.
However, financial markets focused on 2025 expectations with Fed Chairman Jerome Powell and the FOMC board cutting borrowing costs by 25 basis points.
In addition, Fed officials turned their attention to the inflation reading as shown in the dot plot. They forecast two 25-basis-point rate cuts in 2025 and two more for 2026.
Reuters sources said Donald Trump wants to stop a new federal funding plan that includes disaster aid, a two-year debt limit and agree to a one-year extension of the farm bill.
The possibility of a government shutdown would push the yellow metal higher due to its safe-haven status amid political uncertainty that tends to thrive in a less-than-stellar environment.
Ahead of the week, the economic docket will feature core releases of the Personal Consumption Expenditures (PCE) Price Index, the Fed’s favorite inflation gauge, and the University of Michigan (UoM) Consumer Sentiment survey.
