• Gold price refreshes new weekly low following strong US Retail Sales figures that dim expectations for aggressive Fed easing next year.
• Despite a drop in Treasury yields, a resilient US Dollar limits Gold's upward momentum.
• Investors eye the Fed's policy announcement and the core PCE Price Index release.

Gold price dropped to a new weekly low of $2,633 on Tuesday following the release of strong Retail Sales data in the United States. This weighed on investors' expectations of the Federal Reserve (Fed), which is expected to adopt a gradual approach to easing in 2025. At the time of writing, the XAU/USD trades at $2,637, down 0.57%.

The Fed has begun its two-day meeting in Washington, DC, and is expected to lower interest rates by 25 basis points (bps) on Wednesday. The markets have already priced in the decision, but participants are looking for the Summary of Economic Projections (SEP) and the Dot Plot. This will provide investors with the Fed rate path for 2025.

The US economic docket witnessed a strong Retail Sales report in November. Later, the Fed announced that Industrial Production for the same period plunged in monthly and annual figures, an indication that business activity continued to suffer from higher interest rates.

Bullion prices remain pressured even though US Treasury bond yields and real yields retreated. Nevertheless, the steady US Dollar keeps the non-yielding metal from extending its gains.

Lower interest rates the Fed sets are usually a tailwind for Gold prices. Speculation that Trump’s upcoming administration would implement expansionary fiscal policies that put upward pressure on inflation could trigger a change among the Federal Open Market Committee (FOMC) members.

Ahead this week, the US economic docket will feature the FOMC policy decision and the release of the core Personal Consumption Expenditures (PCE) Price Index.

Daily digest market movers: Gold price slips below $2,650, extends losses

• Gold prices plunged as US real yields are pressured, falling two basis points to 2.059%, a tailwind for the precious metal.
• The US 10-year Treasury bond yield drops two and a half basis points to 4.379%.
• The US Dollar Index rose 0.07% to 107.01.
• US Retail Sales in November rose by 0.7% MoM, up from 0.5% in October, above estimates. Yearly, sales jumped from 2.9% to 3.8%.
• Industrial Production in November improved compared to October yet dipped to -0.1% MoM,  up from -0.4% and below estimates of 0.3%
• US business activity remains robust in the services segment, according to S&P Global.
• The CME FedWatch Tool suggests that traders had priced in a 99% chance of a quarter-point rate cut on Wednesday.
• For 2025, investors are betting that the Fed will lower rates by 100 basis points.