WASHINGTON: Gold steadied after four days of gains, with conflicting remarks from US Federal Reserve (Fed) officials prompting traders to curb bets on further monetary easing next year.
Bullion was trading at around US$4,310 an ounce, having added more than 2% last week.
Though the Fed delivered a third straight interest rate cut last Wednesday, three policymakers voted against the move and opinion is divided about the extent of further easing in 2026.
Two of the dissenters, Chicago Fed president Austan Goolsbee and his Kansas City counterpart Jeff Schmid, issued statements last Friday outlining the rationale for their votes.
Goolsbee said it would have been “more prudent” to have waited for further information before cutting rates again after a government shutdown delayed key economic reports, while Schmid said inflation “remains too high”.
Precious metals typically prosper in a low-rate environment as they don’t pay interest.
Gold has surged more than 60% this year and silver has more than doubled, with both metals on track for their best annual performances since 1979.
The scorching rallies have been underpinned by increased central bank buying and a retreat by investors from sovereign bonds and currencies.
Holdings in gold-backed exchange-traded funds have risen every month this year except May, according to the World Gold Council.
“We still expect continued central bank buying, alongside private investor flows under Fed easing, to lift gold prices to US$4,900 by the end of 2026,” analysts from Goldman Sachs Group Inc, including Lina Thomas, said in a note.
Silver has been bolstered in recent weeks by speculative bets on lingering supply tightness after a historic squeeze in October. The white metal hit a record of US$64.6573 an ounce last Friday.
Gold gained 0.3% to trade at US$4,314.20 an ounce in Singapore. Silver added 0.2% to reach US$62.11, after losing 2.5% last Friday. Platinum and palladium rose, while the Bloomberg Dollar Spot Index was flat. — Bloomberg
