Gold falls due to dollar strength

WASHINGTON (dpa-AFX) – Gold traded lower on Friday and the U.S. dollar was poised for a big annual gain after the Federal Reserve backed cautious interest rate cuts in 2025.

Spot gold fell 0.3 percent to $2,626.69 an ounce, while U.S. gold futures fell half a percent to $2,641.19.

The dollar headed for an annual gain of nearly 7 percent as recent data signaled a robust U.S. economy.

Federal Reserve Chairman Jerome Powell said earlier this month that further cuts in borrowing costs now depend on further progress in reducing stubbornly high inflation, prompting traders to lower their estimates of how much borrowing costs are expected to fall in the coming year will be taken back.

Traders currently expect the Fed to cut interest rates by 37 basis points in 2025, with no cut fully priced into money markets by June.

Market participants also expect far-reaching economic changes under a Trump administration.

U.S. President-elect Donald Trump has proposed deregulation, tax cuts, tariff increases and tougher immigration policies that economists see as both pro-growth and inflationary.