Gold Shines Amid Uncertainties: Will It Continue to Sparkle in 2025?

Gold prices (XAU/USD) are on the rise this Monday, recovering losses from the previous session despite light trading ahead of the New Year holiday. The yellow metal continues to gain safe-haven demand as traders focus on the incoming Trump administration's policies and the Federal Reserve's (Fed) interest rate outlook for 2025.

Geopolitical Tensions: The prolonged Russia-Ukraine conflict and Middle East unrest provide strong upward support for Gold. Recent incidents in Gaza and Moscow have intensified market concerns.

US Dollar Weakness: The US Dollar Index (DXY) is subdued around 108.00, while Treasury yields decline, making Gold more appealing.

Fed’s Rate Policy: The Fed's cautious stance on rate cuts in 2025 reduces pressure on non-yielding Gold, keeping the price trend supported.

Market Sentiment: Speculation over Trump’s trade policies and potential tariffs could increase risk aversion, further boosting gold demand.

Gold is set to close the year with a stunning 27% annual gain, its best performance since 2010. This rally is fueled by central bank buying, rising geopolitical risks, and monetary easing by major economies.

Traders should monitor Fed policies, geopolitical events, and the US Dollar's movement closely. These factors will shape the direction of gold prices in the coming months.

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