Gold edges up as focus shifts to incoming Trump administration

BENGALURU Gold prices ticked up on Monday, while investors looked forward to the US Federal Reserve's interest rate outlook and President-elect Donald Trump's tariff policies, which could shape the metal's 2025 trajectory.

Spot gold was up 0.2% at US$2,626.30 per ounce as of 0318 GMT. US gold futures gained 0.3% to US$2,638.70.

The dollar index has been rather flat, helping gold maintain its sideways movement, said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.

"Geopolitical tensions have been a major factor in gold's uptrend this year and are still likely to be a part of the narrative in 2025, especially with Trump entering the picture," he said.

Markets are now preparing for major policy shifts, including potential tariffs, deregulation, and tax changes in 2025, as President-elect Trump returns to the White House in January.

The bullion has gained over 27% so far this year and scaled an all-time peak of US$2,790.15 on Oct 31, fuelled by significant Fed rate easing, including a jumbo cut in September, along with heightened geopolitical uncertainties.

Gold is considered a hedge against geopolitical turmoil and inflation.

The US central bank has reduced rates by 100 basis points this year, but has hinted at fewer reductions in 2025. Higher rates reduce the non-yielding asset's appeal.

"From a very short-term perspective, until the start of the new year, we are very likely to see this kind of lethargic sideways price movement," Wong said.

Trading activity is expected to remain quiet at the year-end.

Spot silver added 0.1% to US$29.40 per ounce, platinum edged higher by 0.2% to US$921.45, and palladium was up 0.1% to US$912.84.

- Reuters