Gold prices edged higher on Monday, December 30, as geopolitical instability, particularly in the Middle East, boosted the metal’s appeal as a safe-haven asset. Investors are also eyeing the U.S. Federal Reserve’s interest rate policies and President Donald Trump’s upcoming tariff decisions, both of which could significantly impact gold’s market trajectory in 2025.
As of 0040 GMT, spot gold rose by 0.1% to $2,622.93 per ounce, while U.S. gold futures climbed 0.2% to $2,637.30.
Geopolitical developments were a key driver of the price increase. Israeli airstrikes have reportedly killed at least 25 people, according to medics and civil emergency services. Meanwhile, South Korea’s parliament voted to impeach acting President Han Duck-soo on Friday, following the suspension of President Yoon Suk-yeol earlier this month.
Gold, traditionally viewed as a hedge against geopolitical risks and inflation, has enjoyed a significant rally in 2023. Despite the potential for higher interest rates, which typically reduce the appeal of non-yielding assets like gold, the metal has risen more than 27% this year. It reached an all-time high of $2,790.15 on October 31, driven by aggressive rate cuts from the U.S. Federal Reserve and mounting geopolitical uncertainty.
With the year-end approaching, trading activity is expected to remain subdued, but markets are gearing up for potential policy shifts in 2025, particularly as President-elect Donald Trump prepares to return to the White House in January. These shifts may include changes to tariffs, deregulation, and tax policies, all of which could influence the economic landscape and, by extension, gold prices.
The U.S. Federal Reserve, after substantial rate cuts in September and November, continued its easing policies in December, though it signaled that fewer reductions are expected in 2025.
Meanwhile, holdings of the SPDR Gold Trust (GLD), the world’s largest gold-backed exchange-traded fund, decreased by 0.03% to 872.52 tonnes as of Friday.
In other precious metals, spot silver rose by 0.1% to $29.41 per ounce, platinum gained 0.4% to $922.80, and palladium climbed 0.5% to $915.69.
Gold’s price fluctuations are likely to continue in the coming weeks as traders prepare for a year filled with potential policy changes and ongoing geopolitical volatility.
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