Gold prices continued their steady ascent in early 2025, extending a remarkable rally from 2024. The yellow metal benefited from a softer U.S. dollar, even as the Federal Reserve’s cautious approach to rate cuts tempered investor enthusiasm. With global uncertainties still shaping markets, gold remains a focal point for those seeking stability and long-term value.
Spot gold climbed 0.3% to $2,632.82 per ounce in Asian trading, while February futures edged up to $2,644.47 an ounce. The metal’s stellar 27% performance in 2024 marked its best year since 2010, spurred by the Fed’s aggressive rate cuts and geopolitical turbulence. Lower interest rates have historically boosted gold’s appeal by reducing the opportunity cost compared to yield-bearing assets. These conditions encouraged investors to view gold as both a hedge against volatility and a store of value.
While gold saw significant gains last year, its upward trajectory faced a setback after the Fed’s December meeting, which signalled just two additional rate cuts for 2025. This announcement dampened optimism, leading to subdued price movements since. Despite this, the weaker dollar lent support, as a strong dollar typically weighs on gold by increasing costs for international buyers.
Other precious metals mirrored gold’s upward momentum. Platinum futures rose 0.7% to $916.65 an ounce, while silver futures surged by 1.6%, reaching $29.715 an ounce.
Industrial metals like copper also experienced gains. A weakened dollar and modest growth in Chinese manufacturing buoyed prices. Benchmark copper futures on the London Metal Exchange rose 0.9%, driven by December’s Caixin PMI data, which showed slower-than-expected growth. Markets now await further clarity on Beijing’s stimulus plans for 2025, as the government signals a loosening of monetary policy to bolster economic activity.
As 2025 unfolds, gold’s allure remains robust amid shifting monetary policies and market dynamics. For investors, the metal continues to offer a compelling balance of safety and opportunity.
Gold continues to serve as a critical hedge against uncertainty, offering investors a valuable tool for navigating complex global markets.
London-listed company KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
