Investing.com– Gold prices were largely steady on Wednesday after falling in the previous session, as the Federal Reserve kicked off its December policy meeting that is expected to conclude with a rate cut.
However, markets remain concerned about the long-term rate outlook in the U.S.. The Fed is expected to lower more gradually next year after cutting it at the end of its two-day meeting on Wednesday.
 was largely unchanged at $2,643.90 an ounce, while  expiring in February were marginally lower at $2,659.46 an ounce by 8:51 ET (13:51 GMT).Â
Gold under pressure on expectations of slower Fed rate cut path in 2025
The Fed is widely expected to cut interest rates by 25 basis points, but the focus will be on the Fed’s future economic projections and Chair Jerome Powell’s comments.
Signals on the Fed’s long-term rate outlook remain in focus as inflation has remained stubborn and is expected to rise further under upcoming President Donald Trump.
Gold, unlike interest-bearing assets like bonds or savings accounts, does not generate income. Therefore, when interest rates are higher, the opportunity cost of holding gold increases, making it less attractive to investors.
Added to that, the dollar has remained strong, with the remaining near a three-week high. Higher rates typically strengthen the dollar, further pressuring gold, as it is priced in dollars and becomes more expensive for foreign buyers.Â
Additionally, higher rates often signal a stronger economy, which can reduce demand for gold as a safe-haven asset.
In addition to the Fed, the and are also scheduled to make rate decisions this week. The BOE is expected to keep rates steady, while markets are divided on whether the BOJ will raise rates further.
Other precious metals were also slightly weaker on Wednesday. fell 1.3% to $931.25 an ounce, while fell 0.3% to $30.832 an ounce.
Among industrial metals, copper prices remained steady on Wednesday as recent data from China, the world’s largest consumer of copper, indicated weakening consumption and challenges in the property sector.Â
Benchmark  on the London Metal Exchange rose 0.2% to $9,031 a ton, while one-month  rose 0.3% to $4.1570 a pound.
This was despite expectations of looser monetary policies and increased fiscal spending in the country. Reuters reported on Tuesday that Beijing will raise its budget deficit to 4% from 3% of gross domestic product in 2025- its highest on record, and will also target GDP growth of 5% for a third consecutive year.
(Ayushman Ojha contributed to the article)
