Gold prices climbed on Thursday, supported by a weakening U.S. dollar and ongoing geopolitical uncertainties. The precious metal’s rise comes as investors anticipate potential shifts in U.S. monetary policy under the Federal Reserve in 2025 and assess the potential impact of former President Donald Trump’s tariff policies on the global economy.
As of 0501 GMT, spot gold rose 0.5%, reaching $2,627.16 per ounce. The increase builds on the metal’s impressive 27% gain this year, positioning it for its best annual performance since 2010, driven by substantial interest rate cuts by the Federal Reserve and heightened global geopolitical instability. Gold, often viewed as a safe-haven asset, thrives in environments of low interest rates and heightened uncertainty.
U.S. gold futures added 0.3%, trading at $2,643.40. Despite the holiday-shortened trading week, which is expected to reduce volumes as the year ends, market participants are watching closely for any signs of further movement.
The dollar index, which tracks the greenback against a basket of currencies, weakened slightly, making dollar-denominated gold more affordable for investors holding other currencies. IG market strategist Yeap Jun Rong noted that “some inaction in the U.S. dollar and U.S. Treasury yields allowed gold prices to recover following their post-Fed dip.” He also pointed out that the usual positive trends for gold in the last week of December are contributing to its recent gains.
Geopolitical factors also remain in focus. Tensions between Hamas and Israel escalated on Wednesday, with both sides accusing each other of blocking the finalization of a ceasefire agreement, despite recent signs of progress. Brian Lan, managing director of Singapore-based dealer GoldSilver Central, suggested that if the situation in the Middle East worsens, it could drive further demand for gold. However, he also noted, “I don’t expect gold to do much at this point and it will likely close around current levels by year-end.”
Traders are also awaiting U.S. jobless claims data due later today and preparing for significant policy changes when Trump returns to office in January, including potential tariffs, deregulation, and tax shifts.
Meanwhile, markets in Australia, New Zealand, Hong Kong, and the Eurozone are closed on Thursday for the Boxing Day public holiday.
In other precious metals, spot silver held steady at $29.64 per ounce, while platinum fell 0.5% to $939.39 and palladium dropped 1.5% to $939.33.
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