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Gold Prices Soar in Record-Breaking Year
(Reuters) – On the last trading day of a remarkable year, gold prices saw an uptick, capping off what has been an exceptional performance for the metal. Factors driving this surge included significant buying from central banks, ongoing geopolitical tensions, and easing monetary policies from major financial institutions.
As of 0807 GMT, gold rose 0.3% to reach $2,614.23 per ounce, while U.S. gold futures also increased by 0.3%, reaching $2,626.20.
“Gold has emerged as one of the standout assets in 2024, with its price rise largely supported by expectations of a shift towards a more accommodating interest rate environment,” remarked Tim Waterer, chief market analyst at KCM Trade.
With an impressive gain of over 26% year-to-date, this marks the largest annual increase for gold since 2010. The metal previously hit a peak of $2,790.15 on October 31, buoyed by a series of record-breaking rallies throughout the year.
Looking ahead, the market anticipates new catalysts, particularly a series of U.S. economic reports scheduled for release next week that may impact the Federal Reserve’s outlook on interest rates for 2025, alongside potential tariff policies from President-elect Donald Trump.
According to Waterer, “In 2025, the trajectory of U.S. interest rates will serve as a critical factor influencing gold prices. Trump’s trade policies will play a vital role in shaping the inflation outlook, the Federal Reserve’s rate decisions, and subsequently, gold prices.”
The Federal Reserve adopted an aggressive rate-cutting strategy in September, November, and December but signaled a more cautious approach in their recent meeting regarding future rate cuts for 2025. Other central banks have also shown restraint in indicating their rate path for the upcoming year.
Aneeka Gupta, director of macroeconomic research at WisdomTree, stated, “Gold is likely to receive support in 2025 from increasing geopolitical uncertainty, trade risks, and sustained demand from central banks, which will help counterbalance pressures from a stronger U.S. dollar and a slowed pace of Federal Reserve easing.”
Traditionally viewed as a safeguard against inflation and market instability, gold’s appeal can diminish in a high interest rate environment since it does not yield interest.
In related markets, spot silver remained stable at $28.94 per ounce. Meanwhile, palladium saw a 0.5% increase to $904.96, and platinum rose 1% to $912.77. Silver is on track for its strongest showing since 2020, with gains exceeding 21% this year, while platinum and palladium are projected to close the year with losses of about 7% and 17%, respectively.
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