Gold prices surged to a two-week high on Thursday, driven by safe-haven buying ahead of the Federal Reserve’s rate outlook and President-elect Donald Trump’s proposed trade tariffs. Spot gold rose 1.2% to $2,654.24 an ounce, while US gold futures settled 1.1% higher at $2,669.
Analysts say bullion thrives in low-interest-rate environments and acts as a hedge against economic and geopolitical risks. Russia launched a drone strike on Kyiv on Wednesday, fueling concerns about international tensions.
In 2024, gold prices gained over 27%, driven by rate cuts, central-bank buying, and geopolitical tensions. Fawad Razaqzada, market analyst at Forex.com, expects corrections in the early part of the year could set the stage for a renewed rally, with a target price of $3,000 an ounce.
Trump’s inauguration on January 20 has heightened uncertainty, with proposed tariffs and protectionist policies expected to be inflationary. Analysts say the unwinding of the “Trump trade” – characterized by a strong US dollar and robust equity markets – could weaken the dollar and bolster gold prices.
Silver rose 1.9% to $29.43 an ounce, while platinum climbed 1.9% at $920.72. The metals market is awaiting next week’s US job openings data and the Federal Reserve’s December FOMC meeting minutes to gauge the interest-rate outlook for 2025.
Source: https://www.reuters.com/markets/commodities/gold-nudges-higher-market-awaits-us-data-economic-cues-2025-01-02