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Gold steadies in holiday lull as markets eye 2025 Fed relocations

Gold prices steadied in holidaythinned trade on Tuesday as financiers looked ahead to the U.S. Federal Reserve's rate of interest strategy and Presidentelect Donald Trump's tariff policies that could form the metal's trajectory next year.

Spot gold was bit changed at $2,616.31 per ounce, since 9:27 a.m. ET (1426 GMT). U.S. gold futures were consistent at $2,631.60.

The present sideways trend seems mostly driven by the low liquidity environment, said Zain Vawda, market analyst at MarketPulse by OANDA.

Gold had a stellar year in 2024, poised for its best efficiency because 2010 with a 27% gain.

A similar rally could happen in 2025, but this will mainly hinge on geopolitical developments, Vawda added. Without. unexpected geopolitical disruptions, the base case projects gold. rates around $2,800/ oz, driven by persistent risks and trade. war concerns.

Bullion is considered a safe financial investment during economic and. geopolitical turmoil.

Analysts had predicted that successive record highs in 2024. would set the stage for a similar rally in 2025, fueled by. continual central bank buying, rising geopolitical tensions, and. Fed rate cuts.

However, the momentum began to wane in early November as the. dollar strengthened in the middle of Trump euphoria, denting gold's rally.

With Trump set to go back to the White House in January, U.S. financiers are bracing for substantial policy shifts in 2025,. including higher trade tariffs, deregulation, and tax modifications,. all of which might have inflationary implications.

If (tariffs are) borne out, this would give less space for. the U.S. Fed to continue cutting rates of interest, and we've seen. the market currently downsizing expectations on that front for. 2025, stated Frank Watson, rare-earth elements expert at Kinesis. Money.

While the Fed aggressively cut rates in September, November,. and December, it has actually signaled fewer cuts in 2025 due to. stubbornly high inflation.

Higher rates increase the chance cost of holding the. non-yielding bullion.

Spot silver was unchanged at $29.66 per ounce,. platinum increased 0.2% to $941.25, while palladium. gained 0.9% to $938.20.

(source: Reuters)