Gold rose above $2,610 per ounce on Tuesday, recovering losses from the previous session amid the quiet holiday-season trading.
Gold rises in thin holiday trading
Investors continued to assess the Federal Reserve’s outlook for next year, factoring in a slower pace of rate hikes in 2025 after the Fed signaled fewer cuts. However, this expectation was tempered by softer-than-expected US PCE inflation data, which raised the possibility of additional rate cuts, benefiting gold as a non-yielding asset.
Strong central bank demand
Meanwhile, the World Gold Council reported strong central bank demand, reaffirming gold’s role as a safe-haven asset, with central banks being net buyers for over 15 years. The metal is on track for a 27% increase this year, positioning it for its best performance since 2010, driven by central bank purchases, geopolitical tensions, and easing policies by major banks.
