Gold prices faced downward pressure on Friday as elevated U.S. Treasury yields diminished the appeal of non-yielding bullion during a holiday-thinned trading week. Markets are closely monitoring President-elect Donald Trump’s impending return to office and the potential implications of his inflationary policies on the Federal Reserve’s outlook for 2025.
Key Details:
Price Movements:
Spot gold fell by 0.6% to $2,619.33 per ounce as of 1:41 p.m. ET.
U.S. gold futures settled 0.8% lower at $2,631.90.
Gold has experienced a weekly decline of 0.1%.
Market Influences:
Higher Treasury yields have contributed to gold’s decline, with analysts noting that gold is likely to remain under pressure in the thin holiday market.
The dollar index is on track for a fourth consecutive week of gains, which further reduces gold’s attractiveness for holders of other currencies.
The benchmark U.S. 10-year yields are trading near their highest levels since May 2, impacting gold prices negatively.
Year-to-Date Performance:
Gold has surged 28% this year, reaching a record high of $2,790.15 on October 31, driven by the Federal Reserve’s rate-easing cycle and escalating global tensions.
Analysts’ Outlook:
Despite the Fed projecting fewer rate cuts, most analysts maintain a bullish outlook for gold in 2025. They anticipate that geopolitical tensions will remain high, central banks will continue their robust gold-buying, and political uncertainty will persist with Trump’s return to the White House.
Trump’s proposed tariffs and protectionist trade policies may ignite potential trade wars, enhancing gold’s appeal as a safe-haven asset.
Future Projections:
Bob Haberkorn, a senior market strategist at RJO Futures, suggested that if current trends continue, gold could potentially reach $3,000 by summer 2025, supported by ongoing central bank buying.