Gold Steady Ahead of Holidays

24 Dec 2024 , 10:33 AM

Ahead of a truncated trading week owing to the Christmas holiday, investors are preparing for a less aggressive course of interest rate cuts from the Federal Reserve next year, which is why gold prices remained stable on Tuesday.

Spot gold was trading unchanged at $2,614.87 an ounce. At $2,628.90, U.S. gold futures were stable.

As year-end draws near, trading volumes are likely to decline on a week with fewer holidays.

How quickly and profoundly the U.S. central bank lowers rates will be a major concern for investors in 2025. After a period of aggressive rate hikes, the Fed signalled fewer cuts in 2025 but continued to reduce in December.

Markets are still pricing in only about 35 basis points of easing for 2025, despite some worries about the rate of reduction next year being allayed by a benign U.S. inflation reading on Friday.

When President-elect Donald Trump returns to the White House in January, U.S. investors are bracing for a wide range of changes in 2025 that will impact markets, from tax policy to tariffs and deregulation.

Gold reached several all-time highs this year, up 27% so far to its greatest annual performance since 2010, propelled by strong central bank purchases, geopolitical unrest, and major banks’ relaxation of monetary policy.

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