Gold holds steady near $2,630 as traders weigh Fed policy outlook and geopolitical tensions, while institutional forecasts point to significant upside potential in 2025. The precious metal maintains its impressive 2024 gains despite recent volatility, supported by central bank buying and inflation hedge demand.
Key Market Statistics:
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Open account Try demo Download mobile app Download mobile app- Current Price: $2,632
- 2024 All-Time High: $2,748.23 (October)
- Weekly Change: -1.0%
- YTD Performance: +27%
- Post-Fed Decision Move: +1.1%
- Monthly Central Bank Purchases: Record high in October
Fed Policy Impact
Recent PCE data showing muted inflation has reinforced expectations for rate cuts in 2025, though the Fed's cautious stance on the pace of easing has introduced some near-term volatility. Gold's non-yielding status makes it particularly sensitive to interest rate expectations, with prices finding support from anticipated monetary easing.
Central Banks Demand
Global central bank purchases remain a key driver, with the IMF reporting October marking the year's highest monthly accumulation. UBS has revised its 2024 purchase forecast upward to 982 metric tons, significantly above the post-2011 average of 500 metric tons, reflecting continued institutional diversification strategies.
Institutional Outlook
Goldman Sachs has positioned gold among its top commodity trades for 2025, projecting prices to reach $3,000 per ounce by year-end. UBS maintains a similarly bullish stance with a $2,900 target, recommending a 5% portfolio allocation. Both institutions cite central bank buying, rate cut expectations, and geopolitical uncertainties as key catalysts.
Political and Geopolitical Factors
The market is closely monitoring potential policy shifts under Trump's presidency, particularly regarding fiscal and trade policies. Ongoing tensions in Europe and the Middle East continue to support safe-haven demand, while concerns over U.S. fiscal sustainability could drive additional institutional flows into gold as a hedge.
2025 Outlook
While near-term price action may remain sensitive to Fed policy signals and dollar strength, structural demand from central banks and growing geopolitical uncertainties suggest sustained upside potential. The interplay between monetary policy, institutional flows, and safe-haven demand positions gold for continued momentum through 2025.
Gold (D1 Interval)
Gold is approaching the 38.2% Fibonacci retracement level, which previously served as strong support and currently coincides with the 30-day SMA.
For bulls to regain control, the key target will be the 50% Fibonacci retracement level, which aligns with the 50-day SMA. The RSI is showing signs of bullish divergence, suggesting potential upward momentum. Additionally, the MACD is narrowing, indicating a possible bullish crossover that could confirm a shift in sentiment. Source: xStation
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