Gold Price, Interest Rate Cut, Dollar Weakness
- World gold prices are experiencing an uptick on December 11, 2025, influenced by a weakening dollar index (DXY) and a decline in the US 10-year bond yield....
- The Fed's projections, as indicated by the Dot Plot, suggest further rate cuts of 0.25% each in both 2026 and 2027.
- The Fed's decision to cut interest rates signals a potential shift in monetary policy, aiming to stimulate economic growth.
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Gold Prices Rise Amidst anticipated US Interest Rate Cuts
Table of Contents
Key developments
World gold prices are experiencing an uptick on December 11, 2025, influenced by a weakening dollar index (DXY) and a decline in the US 10-year bond yield. The yield fell from 4.18% to 4.15% following a Federal Reserve (Fed) decision to lower short-term interest rates by 0.25% to a range of 3.50-3.75%. This decision was made with a 9-3 vote.
The Fed’s projections, as indicated by the Dot Plot, suggest further rate cuts of 0.25% each in both 2026 and 2027. Concurrently, former President Donald Trump is preparing for a final interview with potential candidates for the position of Fed chairman, with a final decision expected in early January 2026.
Federal Reserve Policy Shift
The Fed’s decision to cut interest rates signals a potential shift in monetary policy, aiming to stimulate economic growth. The 9-3 vote indicates some internal debate within the Federal Open Market Committee (FOMC) regarding the timing and extent of these cuts.
The Dot Plot, a visual depiction of individual FOMC members’ interest rate projections, provides insight into the committee’s future policy intentions. The anticipated cuts in 2026 and 2027 suggest a cautious approach to tightening monetary policy, even as economic conditions evolve.
Potential Fed Chairmanship Changes
Former President Trump’s involvement in the selection of the next Fed chair introduces a degree of political uncertainty. Kevin Hassett is currently considered the leading candidate to succeed Jerome Powell,despite concerns among Wall Street investors that he might implement more aggressive interest rate cuts at Trump’s behest.
Trump and Hassett are expected to hold at least one additional meeting before a final decision is announced. The appointment of a new Fed chair could significantly impact the direction of US monetary policy and,consequently,global financial markets.
Impact on Gold Prices
Gold traditionally serves as a hedge against inflation and economic uncertainty. Lower interest rates tend to reduce the possibility cost of holding gold, as the returns on interest-bearing assets decrease. This, coupled with a weaker dollar, frequently enough drives up gold prices.
According to Thai PBS, gold prices fell by 150 baht, with jewellery selling for 64,100 baht. However, this report contrasts with the overall trend indicated by the US market factors. This discrepancy may be due to local market conditions or currency fluctuations. Another source, hua Seng Heng, reports an advancement in world gold prices.
| Metric | Value (December 11, 2025) |
|---|---|
| US 10-Year Bond Yield | 4.15% |
| Federal Funds Rate | 3.50-3.75% |
| DXY (Dollar Index) | Value not provided in source, requires further research |