HG MARKETS:

Gold prices rose on Tuesday, marking the last trading day of a record-breaking year that saw the metal achieve its best annual performance since 2010. This surge was driven by strong central bank buying, geopolitical tensions, and monetary easing by major global banks. Spot gold increased by 0.3% to $2,614.23 per ounce, while U.S. gold futures also gained 0.3%, reaching $2,626.20.

Gold had an outstanding year in 2024, largely driven by expectations of a shift toward a lower interest rate environment. As one of the top-performing assets of the year, gold has risen over 27% year-to-date, marking its largest annual increase since 2010. It hit a record high of $2,790.15 on October 31 after a series of rallies throughout the year.

Looking ahead, the market is awaiting new catalysts, including upcoming U.S. economic data next week, which could affect the Federal Reserve’s interest rate outlook for 2025, as well as President-elect Donald Trump’s tariff policies. The U.S. interest rate outlook will remain a key factor for gold prices in 2025, with Trump’s trade policies influencing inflation and the Fed’s rate trajectory, which will impact gold,

The Federal Reserve aggressively cut rates in September, November, and December but indicated fewer cuts for 2025. Other major central banks have also signaled caution regarding their 2025 policies. Gold is likely to remain supported in 2025 due to rising geopolitical risks, trade tensions, and continued demand from central banks, despite headwinds from a stronger U.S. dollar and slower rate cuts by the Fed.

Gold’s appeal as a safe haven comes from its long-standing reputation as a reliable store of value, its ability to hedge against inflation and financial instability, and its global liquidity. This makes it a go-to asset for investors seeking stability during times of crisis or market uncertainty.