The possibility of the Fed cutting interest rates soon pushed gold prices up last week.

World gold prices fell in the trading session on December 15, but ended last week with a 0.8% increase, as the US Federal Reserve (Fed) leaned towards the possibility of monetary easing and predicted interest rates to fall next year.

This session, gold futures price decreased 0.4% to 2,035.70 USD/ounce.

Earlier this week, Fed Chairman Jerome Powell said the monetary policy tightening campaign may be over and the Fed has begun discussing when to cut interest rates.

The CME FedWatch tool shows that the market is pricing in a 70% chance of a rate cut in March. Lower interest rates increase the appeal of non-yielding assets such as gold.

However, New York Fed President John Williams recently made comments that contradict predictions about the possibility of lowering interest rates.

Tai Wong, a metals trader in New York, said that if more Fed officials make comments that contradict Mr. Powell before Christmas, gold prices will fall into a deeper correction phase.

The dollar strengthened in the session but fell for the week, making gold cheaper for holders of other currencies. The yield on the benchmark 10-year U.S. Treasury note also posted its worst week since March.

Earlier this week, gold prices fell in the first two sessions of the week due to the strong US dollar and bond yields. But after the Fed's policy meeting, the price of this precious metal bounced back in the following two sessions, after the Fed signaled that it was stopping its monetary policy tightening cycle.

“The Fed’s recognition of continued easing inflation pressures has increased expectations for rate cuts, sending bond yields and the dollar sharply lower, leading to a rally in gold and silver,” said David Meger, director of metals trading at commodities trader High Ridge. “We believe the current uptrend in gold is a sustainable one.”