At 12:15 GMT, XAU/USD is trading $2625.45, up $8.58 or +0.33%.
Holiday trading keeps focus on Fed policy and US economic data
In holiday trading thinned, gold rose higher on Thursday as markets waited for further signals on the Fed’s 2025 interest rate plans and the economic policies of Donald Trump’s incoming administration. With Eurozone markets closed for Boxing Day, trading volumes remained low.
The first half of 2025 could provide support for gold due to geopolitical risks, but the second half could see profit-taking as economic conditions evolve. Gold is up 27% this year, underscoring its appeal as a safe haven during periods of uncertainty.
The Fed’s aggressive stance limits gold’s upside
The Federal Reserve’s rate cuts in 2023, including those in September, November and December, have fueled gold’s rally. However, the Fed’s guidance for fewer rate cuts in 2025 provides headwinds for the metal. More restrictive monetary policy tends to support dollar and government bond yields, reducing gold’s appeal.
Traders are keeping a close eye on US unemployment claims data, with forecasts predicting 224,000 claims for the week ending December 21, up slightly from the previous week’s 220,000. A higher-than-expected figure could weaken the dollar, potentially boosting gold.