After logging its biggest gain in nearly 14 years in 2024, the price of gold continued to rise on the first trading day of 2025 and hit a new high for nearly two weeks. From Monday’s(December 30) low of $2,608 per ounce to Thursday’s close of $2,671 per ounce, the price of Nymex gold futures has cumulatively risen more than $50 this week.
According to FX Empire analyst James Hyerczyk, Trump’s tariffs and the prospect of a resurgence in inflation, combined with the Federal Reserve’s slowing path of interest rate cuts, should put gold in a favorable position for further gains. And gold’s rise today has turned a key resistance level of $2,629 per ounce into a new support level on a technical level.
Hyerczyk forecasts that investor sentiment remains based on expectations that Trump’s proposed tariffs and protectionist trade measures could drive inflation in 2025, which enhances gold’s appeal as a safe-haven.
Gold prices, which have been trading in a range of $2,583.91 to $2,726.30 since mid-November, are expected to see a breakout once the new administration and the Federal Reserve’s Jan. 28-29 meeting unleash clearer signals.
Analysts added that the Fed’s more cautious approach to rate cuts as inflation stubbornly stays above 2% is providing further support to gold prices. Driven by strong central bank purchases, geopolitical tensions and the Fed’s rate-cutting cycle, gold rose 27% in 2024, its strongest annual performance since 2010. These factors are expected to persist in 2025, providing the basis for further bullishness in the precious metal.
Hyerczyk noted that Treasury yields moderated on the first trading day of the new year, and while Treasury yields are expected to remain high in 2025, several market analysts believe that 2025 could see both bonds and gold prices rise.
Meanwhile, the three major U.S. stock indexes closed collectively lower on the first trading day of 2025. The Dow fell for the fourth consecutive session, while the Nasdaq and S&P 500 fell for the fifth consecutive session. Among big tech stocks, Tesla shares plunged 6.08% as deliveries fell short of expectations in the fourth quarter of 2024 and annual deliveries fell for the first time since 2015.
Hyerczyk cautioned investors that gold traders are likely to be cautious ahead of Trump’s Jan. 20 inauguration and the Federal Reserve’s January meeting. Inflationary pressures and geopolitical risks continue to favor gold as a safe-haven asset, reinforcing bullish sentiment heading into the first quarter of 2025.
