Gold nudges higher, market awaits US data for economic cues

Bullion rose over 27% in 2024

Gold likely to remain bullish in 2025 – analyst

Traders expect Fed to proceed cautiously with rate cuts in 2025

Jan 2 – Gold prices inched higher on Thursday, continuing its momentum from 2024, while traders sought more clarity on the U.S. Federal Reserve’s interest rate trajectory and President-elect Donald Trump’s policies.

Spot gold rose 0.39% to $2,634.15 per ounce, as of 0255 GMT. U.S. gold futures edged up 0.2% to $2,646.30.

Bullion surged over 27% in 2024, its largest annual gain since 2010, driven by Fed’s substantial rate cuts and escalating geopolitical tensions.

The dollar index slipped 0.1%, making dollar-priced bullion more affordable for holders of other currencies.

“Gold seems to be consolidating in a tight range, which often signals a market that’s poised for a breakout. I suspect that breakout will be to the upside,” said Kyle Rodda, financial market analyst at Capital.com.

Gold is likely to remain bullish , driven by geopolitical risks and expectations of rising government debt due to a deep fiscal deficit under Trump’s administration, despite potential challenges from slower Fed rate cuts and U.S. dollar strength, Rodda said.

The market now awaits a fresh set of catalysts, including a slew of U.S. economic data due next week that could influence the interest rate outlook for 2025, and Trump’s tariff policies.

Meanwhile, traders anticipate the Fed to adopt a slow and cautious approach to further rate cuts in 2025, as inflation continues to exceed its 2% target.

Gold is viewed as a hedge against inflation, particularly in times of geopolitical and economic uncertainty.

According to the CME’s FedWatch Tool, markets are pricing in just an 11.2% chance of a rate cut in January.

Spot silver rose 1.5% to $29.29 per ounce, palladium added 0.9% to $912.26, and platinum gained 0.7% to $917.14

Silver ended 2024 as its best year since 2020, while platinum and palladium declined.

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