Safe-haven gold poised for best year since 2010 on rate cuts and global tensions By Reuters
By Rahul Paswan and Swati Verma
(Reuters) – Gold prices were little changed on Tuesday, the final day of trading in a record year that has led the metal to its best annual performance since 2010 thanks to strong central bank buying, geopolitical tensions and easing of monetary policy by the world’s major banks.
it was down 0.1% at $2,603.69 an ounce, as of 0608 GMT. USA also lost 0.1% to $2,615.50.
“Gold had a stellar year in 2024 and much of that upside was predicated on the expected transition to a lower interest rate environment,” said Tim Waterer, chief market analyst at KCM Trade.
As one of the best-performing assets in 2024, bullion prices rose more than 26% year-to-date, the biggest annual jump since 2010, and hit multiple records to close at $2,790.15 on October 31.
The market is now awaiting a fresh set of catalysts, including a slew of US economic data due next week that could weigh on the Federal Reserve’s outlook for interest rates in 2025 and President-elect Donald Trump’s tariff policy.
For 2025, “the outlook for US interest rates will remain the primary driver of the gold price. Trump’s trade policy will be instrumental in shaping the inflationary picture, the Fed’s interest rate path, and in turn, gold prices,” Waterer said.
The Fed cut rates aggressively in September, November and December, but at its last meeting flagged fewer cuts for 2025. Other major central banks have also signaled caution about their 2025 trajectory.
“Gold is likely to remain supported in 2025 by rising geopolitical risks, trade tensions and continued demand from central banks, offsetting the headwinds of a stronger US dollar and a slower pace of Fed easing,” said Aneeka Gupta, director of macroeconomic research at Wisdom Tree.
Gold bullion is seen as a hedge against inflation and turmoil, but high rates reduce the appeal of non-yielding assets.
Spot silver fell 0.5% to $28.80 an ounce, palladium fell 0.3% to $898.39, while platinum added 0.4% to $907.05.
Silver is on track for its best year since 2020 and has added more than 21% so far. Annual losses are predicted for platinum and palladium and have fallen by around 8% and 18%, respectively.
