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Gold prices remained largely unchanged during Asian trading hours on Tuesday, with Spot Gold steady at $2,607.65 per ounce and Gold Futures for February delivery edging 0.2% lower to $2,620.22 per ounce by 00:23 ET (05:23 GMT).
Year-end trading typically sees thin volumes, with institutional investors wrapping up positions ahead of the holiday season, keeping price action subdued.
Gold’s Stellar 2024 Performance
- Annual Gain: Gold prices have surged over 26% in 2024, driven by the U.S. Federal Reserve’s aggressive rate cuts earlier in the year and heightened geopolitical tensions.
- Impact of Low Interest Rates: With interest rates lower, gold became more attractive as a store of value due to its reduced opportunity cost compared to interest-bearing assets.
- December Setback: The Fed’s recent signal of only two rate cuts in 2025 versus earlier expectations of four led to a stronger U.S. dollar and a subdued gold outlook.
Market Outlook for Gold
Gold faces challenges from the strengthening U.S. dollar, which makes the metal more expensive for international buyers. However, persistent geopolitical tensions and inflation concerns could sustain gold’s appeal as a hedge in 2025.
Other Precious Metals
- Platinum: Futures dipped 0.4% to $913.65 per ounce.
- Silver: Futures inched down 0.3% to $29.315 per ounce.
Industrial Metals: Copper Under Pressure Despite China’s Factory Growth
Copper prices were subdued, with Benchmark Copper Futures on the London Metal Exchange edging 0.2% lower to $8,925.50 a ton and February futures largely unchanged at $4.0885 per pound.
- China’s Manufacturing Growth: Data showed China’s factory activity expanded for the third consecutive month in December, supported by stimulus measures. However, growth was weaker than expected, tempering optimism for copper demand.
- Impact of the Dollar: The near two-year high of the U.S. Dollar Index weighed on copper, reflecting the metal’s sensitivity to currency movements.
Outlook: Copper’s performance remains tied to global demand, particularly from China, and the direction of the U.S. dollar as we head into 2025.
