Gold Soars to Start 2025 Amid Fed Focus

2 Jan 2025 , 10:30 AM

After a fantastic 2024, gold began the New Year on a high note as investors awaited additional hints on President-elect Donald Trump’s tariff policy and the U.S. Federal Reserve’s interest rate outlook.

Spot gold was stable at $2,625.48 an ounce. On Thursday, U.S. gold futures dropped 0.1% to $2,639.60.

Bullion surged more than 27% in 2024, its biggest annual gain since 2010, making it one of the best-performing assets.

Geopolitical tensions, central bank purchases, and monetary policy easing by large international banks all contributed to the surge.

Because inflation is still higher than the Fed’s 2% annual target, traders expect the Fed to take a gradual and cautious approach to additional rate decreases in 2025.

Although gold is viewed as a hedge against inflation as well as economic and geopolitical turmoil, its allure as a non-yielding asset is diminished by high interest rates.

For more guidance, traders anticipate the first U.S. jobless claims data, which is due later today, as well as the ADP employment report, Fed meeting minutes, employment report, and U.S. job openings data for the following week.

Palladium increased 0.6% to $909.00, spot silver increased 0.4% to $28.98 per ounce, while platinum decreased 0.1% to $909.32.

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