Gold Rises on Safe-Haven Demand and Lower Yields
Gold rises its highest point in two weeks on Thursday, driven by safe-haven buying and a drop in US Treasury yields. The rise came as markets adjusted ahead of the Federal Reserve’s outlook on interest rates and uncertainty surrounding President-elect Donald Trump’s trade tariffs. Spot gold rose by 1% to $2,649.73 per ounce, marking its highest level since December 18. Meanwhile, US gold futures gained 0.8%, reaching $2,663.20.
Geopolitical Tensions and Market Factors Support Gold
The decline in US 10-year bond yields made gold, which doesn’t earn interest, more attractive. Rhona O’Connell, an analyst at StoneX, noted that while there wasn’t any major news, geopolitical tensions and financial uncertainties were supporting gold. For example, Russia’s recent drone strike on Kyiv and Israel’s military actions in Gaza added to the global instability. Gold is seen as a hedge against these risks, especially in low-interest-rate environments.
Gold’s Outlook for 2025
Looking ahead, analysts are optimistic about gold’s potential. Fawad Razaqzada from Forex.com believes that early-year corrections could pave the way for a fresh rally. He even suggested that gold prices could hit $3,000 per ounce. In 2024, gold experienced its best annual gain in years, thanks to rate cuts, central bank buying, and rising geopolitical tensions.
Other Precious Metals See Gains
In addition to gold, other precious metals also saw increases. Spot silver rose by 2.1% to $29.48 per ounce, palladium gained 1.3% to $922.04, and platinum climbed 2.1% to $922.85.
With ongoing geopolitical tensions and economic uncertainty, gold remains a safe bet for many investors.
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