Gold set for weekly gain; focus on incoming Trump administration, Fed's 2025 path

Gold prices were trading flat on Friday, but were set for a weekly rise, as markets awaited signals on the U.S. economy under the incoming Donald Trump administration and the Federal Reserve's interest rate strategy for 2025.

FUNDAMENTALS

* Spot gold was flat at $2,632.79 per ounce, as of 0024 GMT. Bullion gained 0.45% so far this week.


* U.S. gold futures were nearly unchanged at $2,653.00.

* Trading activity is expected to be subdued as the year-end approaches.

* Data on Thursday showed that the number of Americans filing new applications for jobless benefits fell last week to a one-month low, suggesting a resilient labor market and likely maintaining pressure on the Fed to hold interest rates steady.

* After aggressively cutting rates in September and November, the Fed persisted with easing in December but hinted at fewer reductions in 2025.

* On the geopolitical level, Israel struck multiple targets linked to the Iran-aligned Houthi movement in Yemen on Thursday, including the Sanaa International Airport, and Houthi media said at least six people were killed.

* Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the non-yielding asset's appeal.

* The metal has gained 28% so far this year and scaled an all-time peak of $2,790.15 on Oct. 31, fueled by significant Fed reductions, including a jumbo cut in September, and heightened geopolitical uncertainties.

* Markets are preparing for major policy shifts, including tariffs, deregulation and tax changes, in 2025 as Trump returns to the White House in January.

* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.13% to 872.80 tonnes on Thursday.

* Spot silver was steady at $29.80 per ounce, platinum added 0.4% to $939.69 and palladium rose 0.19% to $926.64.