Will Gold XAU/USD Rise in 2025?

 

Will XAU/USD Rise in 2025?

Speculations have increased that gold prices will continue their record-high trajectory during the new year 2025 trading after prices recorded a historic record high during the 2024 trading.
Also, the gold price index was on the verge of the psychological resistance level of $2800 per ounce.
This is supported by factors such as increased demand for gold as a safe-haven asset amid growing global geopolitical tensions and purchases of gold by central banks for hedging.

Gold surged over 26% in 2024, peaking at $2,790/oz—its best year since 2010—driven by Fed easing, geopolitical tensions, and record central bank buying. Despite a post-Trump dip, gold outperformed most commodities, while base metals fell. In 2025, investors eye US policy shifts and China’s recovery.

Will gold prices rise in 2025?

Recent trading shows gold prices climbing despite a strong US dollar, which hit a two-year high driven by Trump’s trade policies. Rising US Treasury yields, typically a headwind for gold, also failed to stall its gains. Just before the new year, the US Treasury reported a major cyberattack by Chinese entities, further escalating global geopolitical tensions ahead of Trump’s inauguration.

Trading Tips:

Gold prices are expected to stay on an upward path as long as global geopolitical tensions persist, regardless of the US dollar’s strength driven by Trump’s trade wars.

Technically, the Relative Strength Index indicates a balance between bulls and bears. The next bullish target is the key psychological level of $2700 per ounce, but gold must first break through resistance at $2645 and $2666. On the downside, analysts say breaching the $2600 support level could shift momentum to the bears, with potential buying levels at $2585, $2560, and $2538. As always, traders should manage risk carefully and use stop-loss and take-profit orders.

US Federal Reserve Policies and Their Impact on Gold

The US dollar’s surge to a two-year high was largely fueled by the Federal Reserve’s policy shift to slow down easing, especially following Trump’s presidential win, which halted gold’s sharp rise. Moving into 2025, the Fed’s future monetary decisions are expected to play a key role in shaping gold price trends.

Many analysts agree that US monetary policy remains a major driver of global markets, as the Fed works to manage inflation while supporting economic growth. In its final 2024 meeting, the Fed indicated plans for only two rate cuts in 2025—down from four projected in its September outlook.

Keypoints:

• Gold prices are rising despite a strong US dollar and bond yields.

• Geopolitical tensions, including a US Treasury cyberattack, support gold's uptrend.

• Gold’s next resistance targets are $2645, $2666, and $2700 per ounce.

• A break below $2600 could trigger further declines to $2585, $2560, or $2538.

• The Fed’s 2025 interest rate cuts (only two planned) may influence gold prices.

Analysts believe the slower rate-cut plan makes sense since the US economy is expected to stay strong in early 2025. Most big banks have lowered their rate cut forecasts—Bank of America expects two cuts, while Wells Fargo predicts just one.