Market expectations surrounding the incoming Trump administration’s trade policies have further fueled uncertainty, with concerns that tariffs could disrupt global trade and boost demand for gold.
Interest rate forecasts and yields on government bonds
While the outlook for gold remains strong, the Federal Reserve’s approach to interest rates in 2025 could dampen gains. The Fed recently cut its policy rate by 0.25%, but has announced a slower pace of future cuts.
Lower US Treasury yields, with a 2-year yield of 4.32% and a 10-year yield of 4.62%, continue to support gold’s appeal as a non-yielding asset.
Silver follows the performance of gold
Silver (XAG/USD) is also benefiting from safe haven demand, trading at $29.40 with an intraday high of $29.48. Silver is often seen as a more accessible alternative to gold and continues to attract interest amid heightened economic and geopolitical risks. Lower bond yields further increase their attractiveness compared to interest-bearing investments.
Broader market dynamics
The US Dollar Index (DXY) is hovering around 108.00, just below a two-year high, reflecting investor caution. With the Federal Reserve and geopolitical developments driving market sentiment, gold and silver are likely to remain in focus as traders look for stability in uncertain times.
The combined effects of economic policies, central bank strategies and global tensions indicate that gold and silver could maintain their momentum through 2025 and provide refuge in a volatile market landscape.