Gold price today: Gold rates go up ahead of New Year. Will bullion become volatile in January?

Gold prices rose on Thursday, driven by safe-haven demand in light trading after the Christmas holiday as markets awaited signals on the U.S. economy under the incoming Trump administration and Federal Reserve's interest rate strategy for 2025, Reuters reported.


Spot gold rose 0.7 per cent to $2,631.52 per ounce, as of 12:01 pm (ET). U.S. gold futures added 0.5 per cent to $2,648.50.



"Some of gold's gains had to do with what's going on in Ukraine with Russia hitting Ukraine's electrical system," said Daniel Pavilonis, senior market strategist at RJO Futures.


"Gold will still be purchased by central banks, and as inflation continues, you may see increased demand for gold on the retail side as well," Pavilonis said, adding that prices are expected to break $3,000 next year.


Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the appeal of holding the non-yielding asset. The yellow metal has gained 28 per cent so far this year and scored an all-time peak of $2,790.15 on October 31.


Next year will be very volatile for bullion, with first-half gains on heightened geopolitical tensions and profit-taking in the second half, said Ajay Kedia, director at Kedia Commodities, Mumbai.


As Donald Trump prepares to return to the White House in January, markets will be closely monitoring U.S. economic data to gauge how the Fed will navigate inflationary pressures anticipated from his administration's policies, including tariffs, deregulation and tax reforms.


After aggressively cutting rates in September and November, the Fed persisted with easing in December but hinted at fewer reductions in 2025. Spot silver rose 0.4 per cent to $29.73 per ounce, platinum fell 0.6 per cent to $938.35 and palladium shed 2.9 per cent to $925.24.

FAQs

Q1. Why is Gold considered as safe?
A1. Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the appeal of holding the non-yielding asset.


Q2. What is prediction for Gold Price?
A2. Next year will be very volatile for bullion, with first-half gains on heightened geopolitical tensions and profit-taking in the second half, said Ajay Kedia, director at Kedia Commodities, Mumbai.