Experts bet on big 2025 for gold, PGMs still floundering

A woman picks a gold earring at a jewellery shop in the old quarters of Delhi. Source: Reuters/Anushree Fadnavis

Spot gold eased 0.1% to $2,603.69 per ounce, as of 0608 GMT. US gold futures also shed 0.1% to $2,615.50.

"Gold enjoyed a stellar year in 2024 and much of that move higher was predicated on the expected transition towards a lower interest rate environment," said Tim Waterer, chief market analyst at KCM Trade.

Trump policies and energy reform to dominate 2025 markets

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As one of the best performing assets of 2024, bullion prices have gained more than 26% year-to-date, the biggest annual jump since 2010, and scaled multiple records to end at $2,790.15 on 31 October.

The market now awaits a fresh set of catalysts, including a slew of U.S. economic data due next week that could influence the Federal Reserve's interest rate outlook for 2025, and President-elect Donald Trump's tariff policies.

Trump effect

For 2025, "the US interest rate outlook will remain a primary driver of the gold price. Trump's trade policies will be key in shaping the inflationary picture, the Fed's interest rate trajectory, and in turn, the gold price," Waterer said.

The Fed aggressively cut rates in September, November, and December, but in their last meeting flagged fewer rate cuts for 2025. Other major central banks also signalled caution over their 2025 trajectory.

"Gold is likely to remain supported in 2025 by rising geopolitical risks, trade tensions and ongoing demand from central banks offsetting the headwinds from the stronger U.S. dollar and a slower pace of easing by the Fed," said Aneeka Gupta, director of macroeconomic research at WisdomTree.

Safe haven

Bullion is considered a hedge against inflation and turmoil, but high rates reduce the non-yielding asset's appeal.

Spot silver shed 0.5% to $28.80 per ounce and palladium dropped 0.3% to $898.39, while platinum added 0.4% to $907.05.

Silver is headed for its best year since 2020 and has added over 21% so far.

Platinum and palladium are set for annual losses and have dipped about 8% and 18%, respectively.