Gold prices gained on Tuesday, the last trading day of a record-breaking year that drove the metal to its best annual performance since 2010 on robust central bank buying, geopolitical tensions, and monetary policy easing by major global banks.
Spot gold rose 0.3% to $2,614.23 per ounce, as of 0807 GMT. US gold futures added 0.3% to $2,626.20.
Gold prices have hit record highs over the past six months, gaining about 26% so far this year.
"Gold enjoyed a stellar year in 2024, and much of that move higher was predicated on the expected transition towards a lower interest rate environment," said Tim Waterer, chief market analyst at KCM Trade.
As one of the best-performing assets of 2024, bullion has gained more than 26% year-to-date, marking the biggest annual jump since 2010. Gold last scaled a record high of $2,790.15 on Oct. 31 after a series of record-breaking rallies throughout the year.
The market now awaits fresh catalysts, including a slew of US economic data due next week that could influence the Federal Reserve's interest rate outlook for 2025 and President-elect Donald Trump's tariff policies.
For 2025, "the US interest rate outlook will remain a primary driver of the gold price. Trump's trade policies will be key in shaping the inflationary picture, the Fed's interest rate trajectory, and, in turn, the gold price," Waterer said.
The Fed aggressively cut rates in September, November, and December, but in their last meeting flagged fewer rate cuts for 2025. Other major central banks have also signaled caution over their 2025 monetary policy trajectories.
"Gold is likely to remain supported in 2025 by rising geopolitical risks, trade tensions, and ongoing demand from central banks offsetting the headwinds from the stronger US dollar and a slower pace of easing by the Fed," said Aneeka Gupta, director of macroeconomic research at WisdomTree.
Bullion is considered a hedge against inflation and turmoil, but high rates reduce the non-yielding asset's appeal.
Spot silver steadied at $28.94 per ounce, while palladium gained 0.5% to $904.96, and platinum rose 1% to $912.77.
Silver is headed for its best year since 2020, having added over 21% so far. Platinum and palladium, however, are set for annual losses, dipping about 7% and 17%, respectively.— Reuters
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