Gold prices inched up on Monday, with investors closely monitoring potential shifts in U.S. economic policies under President-elect Donald Trump and the Federal Reserve’s stance on interest rates, which are expected to influence the precious metal’s trajectory in 2025.
As of 0506 GMT, spot gold was up 0.1%, trading at $2,622.74 per ounce. U.S. gold futures also saw a slight gain of 0.1%, reaching $2,635.10. According to Kelvin Wong, senior market analyst for OANDA in Asia Pacific, the dollar index has remained relatively stable, which has allowed gold to maintain a steady price movement.
“Geopolitical tensions have played a significant role in driving gold’s uptrend this year and will likely continue to impact the market in 2025, especially with Trump’s policies coming into play,” Wong said.
In the short term, Wong anticipates that gold prices will likely remain in a narrow range until the new year, showing limited movement. Investors are preparing for potential policy changes under the incoming administration, including tariff adjustments, deregulation, and tax reforms that could shape the U.S. economy in 2025.
Gold has surged by more than 27% this year, reaching an all-time high of $2,790.15 on October 31. This rise has been driven by significant rate cuts by the Federal Reserve, including a major 100-basis-point reduction in September, as well as increasing geopolitical uncertainties. The metal is often seen as a safe haven against both inflation and political instability.
Despite this strong performance, the Federal Reserve has indicated that it may scale back its rate cuts in 2025, which could dampen gold’s appeal. Higher interest rates typically reduce the attractiveness of non-yielding assets like gold.
Meanwhile, other precious metals also saw modest gains. Spot silver rose 0.2%, reaching $29.44 per ounce, while platinum climbed 0.3% to $922.30, recovering from a three-month low hit on Friday. Palladium increased by 0.4%, trading at $915.19.
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