Gold prices are up due to increased risk aversion ahead of the Trump administration and geopolitical tensions, including attacks on Gaza hospitals. However, the outlook for fewer Fed rate cuts in 2025 may limit gold's gains.
Gold price advances due to increased risk aversion ahead of the incoming Trump administration. The precious metal may struggle due to the outlook for fewer Fed rate cuts in 2025. Israeli forces carried out attacks on two hospitals in northern Gaza on Sunday. Gold price (XAU/USD) recovers its recent losses from the previous session, although trading volume is lighter on Monday than usual ahead of the New Year holiday.
The safe-haven Gold gains upward support as markets anticipate signals regarding the United States (US) economy under the incoming Trump administration and the Federal Reserve’s (Fed) interest rate outlook for 2025. The safe-haven demand for the yellow metal could increase as the potential Donald Trump’s tariffs and trade policies could trigger trade conflicts, increasing the risk aversion sentiment. However, the outlook for fewer Fed rate cuts in 2025 might cap the upside for the price of the non-yielding Gold. Additionally, Gold receives upward support from heightened geopolitical risks stemming from the prolonged Russia-Ukraine conflict and ongoing tensions in the Middle East. On Sunday, Israeli forces carried out attacks on two hospitals in northern Gaza, including a strike on the upper floor of al-Wafaa Hospital in Gaza City, which killed at least seven people and critically wounded others. Gold prices are set to finish the year with an impressive 27% gain, representing their strongest annual performance since 2010. This rally has been driven by central bank purchases, rising geopolitical tensions, and monetary easing policies implemented by major central banks. Gold price edges higher as US Dollar remains subdued as Treasury yields depreciate The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, trades around 108.00, slightly below its highest level since November 2022. Traders continue to digest the US Federal Reserve’s (Fed) hawkish pivo
GOLD PRECIOUSMETALS RISKAVERSION TRUMP GEOPOLITICS GAZA
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