Gold kicks off 2025 on positive note, Fed and Trump policy in focus

Gold kicked off the New Year on a positive note after a stellar 2024, as market participants waited for more clues on the U.S. Federal Reserve's interest rate outlook and President-elect Donald Trump's tariff policies.

FUNDAMENTALS

* Spot gold was steady at $2,625.48 per ounce, as of 0014 GMT on Thursday.


* Bullion emerged as one of the top-performing assets in 2024, surging more than 27% in its largest annual gain since 2010.

* The rally was fuelled by central bank buying, geopolitical tensions, and monetary policy easing by major global banks.

* U.S. gold futures fell 0.1% to $2,639.60 on Thursday.

* Traders anticipate the Fed to adopt a slow and cautious approach to further rate cuts in 2025, as inflation continues to exceed the central bank's 2% annual target.

* According to the CME's FedWatch Tool, markets are pricing in an 11.2% chance of a U.S. rate cut in January, with an 88.8% chance of a status quo.

* Gold is seen as a hedge against inflation and geopolitical and economic uncertainty, but elevated interest rates diminish its appeal as a non-yielding asset.

* Traders await initial U.S. jobless claims data due later in the day, along with next week's U.S. job openings data, ADP employment report, Fed meeting minutes, and employment report for further direction.

* Spot silver rose 0.4% to $28.98 per ounce and palladium added 0.6% to $909.00, while platinum shed 0.1% to $909.32.

* Silver rose nearly 22% in 2024 to post its best year since 2020, while platinum and palladium ended the previous year with losses, shedding more than 8% and 17%, respectively.

DATA/EVENTS (GMT) 0145 China Caixin Mfg PMI Final Dec 0700 UK Nationwide House Price MM, Nationwide House Price YY Dec 0850 France HCOB Manufacturing PMI Dec 0855 Germany HCOB Mfg PMI Dec 0900 EU HCOB Mfg Final PMI Dec 0930 UK S&P Global Manufacturing PMI Dec 1330 US Initial Jobless Clm 28 Dec, w/e 1445 US S&P Global Mfg PMI Fina.