Gold price inches higher, market awaits US data for economic cues

WASHINGTON: Gold prices inched higher on Thursday, continuing their momentum from 2024, while traders sought more clarity on the US Federal Reserve’s interest rate trajectory and President-elect Donald Trump’s policies.

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

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

The dollar index (.DXY) slipped 0.1 per cent, 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 (in 2025), 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 US dollar strength, Rodda said.

The market now awaits a fresh set of catalysts, including a slew of US 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 per cent 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 per cent chance of a rate cut in January.

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

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

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