Shelter demand drives up world gold prices

Closing the trading session on December 26, the world spot price of gold increased by 20 USD to 2,633 USD per ounce, due to increased shelter demand. “One reason gold prices increased was the war in Ukraine after Russia attacked the country’s power system,” said Daniel Pavilonis – market strategist at RJO Futures.

US President Joe Biden said on December 25 that he had asked the Ministry of Defense of this country to continue increasing weapons shipments to Ukraine. Previously, he criticized Russia’s attack on several Ukrainian cities and power systems on December 24.

The market is also waiting for more signs about the US economic situation during the term of President-elect Donald Trump and the interest rate strategy of the US Federal Reserve (Fed) in 2025. Session December 26, volume Trading was low because the market had just reopened after the Christmas break.

“Central banks will continue to buy. When inflation persists, people’s demand will also increase,” Pavilonis said. He predicts the price could exceed $3,000 next year. This is also an expected milestone recently raised by many large financial institutions.

Gold is considered a tool to prevent political fluctuations and inflation. However, high interest rates will make gold less attractive. This year, the precious metal has increased by 28%, at one point peaking at 2,790 USD on October 31.

Next year is forecast to have many fluctuations for gold. The first half of the year may increase sharply due to high political tensions and the second half of the year will be sold to take profits, said Ajay Kedia – Director of Kedia Commodities (India).

Mr. Donald Trump will return to the White House in January 2025. Markets are closely watching US economic data to predict the Fed’s interest rate policy, if Mr. Trump changes tax policy as committed. This year, the Fed has loosened monetary policy three times, but signaled that it wants interest rates to slow down next year.