Gold Holds Steady as Markets Brace for Fed Moves in 2025

Gold prices remained flat at $2,616.31 per ounce on Tuesday, with U.S. futures steady at $2,631.60. Trading volumes were muted in a holiday-thinned market, but attention has shifted to the Federal Reserve’s anticipated moves in 2025 and potential policy shifts from President-elect Donald Trump. Gold, which surged 27% in 2024, its best performance since 2010, could see another strong year, though much will depend on economic and geopolitical developments.

Analysts predict gold could climb toward $2,800 per ounce next year, driven by risks like sustained central bank buying and ongoing trade tensions. However, the rally faces headwinds. Strength in the U.S. dollar, spurred by optimism surrounding Trump’s return to office, has tempered momentum since November. Trump's proposed higher trade tariffs, deregulation, and tax reforms are likely to fuel inflation, complicating the Federal Reserve’s ability to cut rates further. 

The Fed, which aggressively reduced rates in September, November, and December, signaled fewer cuts for 2025 as inflation remains stubbornly high. Rising interest rates make gold less attractive due to the higher opportunity cost of holding the non-yielding asset. Nonetheless, gold remains a preferred hedge during periods of economic uncertainty.

What Does This Mean for Me?

Silver was unchanged at $29.66 per ounce, while platinum inched up 0.2% to $941.25, and palladium gained 0.9% to $938.20. While the metals market waits for clarity on the Fed’s stance, investors are cautiously optimistic about gold’s potential in 2025, with its trajectory tied closely to global risks and shifts in monetary policy.