Gold continued its winning streak due to safe-haven demand sparked by worries about Donald Trump’s proposed policies, while the UK faced a budget crisis.

In response to Fed minutes that suggested a possible delay in the rate-easing cycle, gold is trading strongly. Furthermore, investors are turning to precious metals for stability due to increased market volatility from elevated geopolitical tensions.

In November 2024, the central bank increased its gold reserves by 53 tons, indicating continued strong purchases. The Reserve Bank of India resumed its 2024 purchasing spree, increasing 8 tons of its gold reserves in November.

Precious metals are trying to form a base and rebound as US data showed a slowing economy and a “timid” reacceleration in inflation. This week is critical for gold traders, who will closely monitor key economic data.

US President Joe Biden reportedly discussed contingency plans for striking Iran’s nuclear facilities if Tehran made significant progress toward developing a nuclear bomb before Donald Trump’s inauguration on January 20.

In 2024, gold prices climbed by 27%, marking the best annual performance since 2010. This surge has been spurred by central bank purchases, increased geopolitical concerns, and major central banks’ monetary easing programs.

The Federal Reserve, as expected, lowered its benchmark policy rate for the third time since September and signalled that rate reduction would halt, causing a sell-off in the precious metals market.

The US economic calendar includes the release of housing market data—Building Permits and Housing Starts today. The attention, however, will remain on the key FOMC monetary policy decision.

In anticipation of a 25-bps rate cut on Wednesday, gold and silver investors await the Fed’s interest rate decision and economic forecasts.

Gold and silver struggle to hold gains, but geopolitical risks, trade war fears, and Fed rate cut bets continue to support the prices.

Following the announcement of US inflation data yesterday, gold prices continued their upward trajectory. As prices continue their uptrend, the next level to watch for is the previous high of $2800 (Rs 80000).

In Syria, various rebel factions are beginning negotiations to form a government while foreign powers like Israel and Turkey take positions. The increasing uncertainty in an already volatile region supports demand for the safe-haven metal.