Gold prices delivered an exceptional performance in 2024, surging by 27% to close the year at $2,620 per ounce, marking its best annual gain in a decade. As 2025 begins, the precious metal opens on a firm note. However, continued geopolitical tensions and evolving US monetary policy could shape its trajectory in the months ahead.
Gold’s stunning rise last year, from $2,060 to $2,620 per ounce, was driven by several key factors. The Federal Reserve’s monetary easing created a favourable environment for non-interest-bearing assets like Gold. Heightened geopolitical tensions, particularly in the Middle East and the Russia-Ukraine conflict, bolstered its safe-haven appeal. Additionally, record purchases by central banks further reinforced the demand for the precious metal.
Gold price dynamics (December 2024 – January 2025). Source: TradingView.
Gold price prediction: 100-day EMA and RSI signal potential for further gainsGold kicked off 2025 with a 0.5% early surge during the Asian session on January 2, reaching a three-day high of $2,636 per ounce. However, the rally was capped by the Fibonacci 0.786 resistance level, leaving prices stagnant near this mark through the European session. Despite its fairly good start, Gold faces potential headwinds.
The Federal Reserve is expected to adopt a more restrictive monetary stance in 2025, with fewer rate cuts anticipated. This shift is partly influenced by uncertainties surrounding the economic plans of the incoming Trump administration. As a result, Gold’s appeal as a non-yielding asset may face pressure, tempering its upward momentum.
Technically, the 100-day EMA supports a continued uptrend, aligning closely with the critical $2,600 psychological support level, which could play a pivotal role in maintaining bullish momentum. Meanwhile, the RSI is attempting to break above 50, indicating a potential shift in buying strength.
Geopolitical risks and central bank demand are likely to remain key supportive factors for Gold in 2025, as confirmed by a World Gold Council survey anticipating further accumulation in 2025. These factors will be critical in determining whether the metal can extend its decade gains.
In Q4, bearish momentum pushed Gold prices lower as they struggled amid hawkish Federal Reserve stance. Gold’s 2024 rally was supported by strong central bank purchases and rising geopolitical tensions.
