Gold prices rise 1% at settlement despite US dollar gains

Gold bars

Gold prices strengthened their gains during the first trading session of the new year today, Jan. 2, after the yellow metal secured annual gains that were driven by safe haven demand and the end of the monetary tightening cycle in the US and Europe.

February gold futures advanced by more than 1%, or $28, to finish at $2,669, after touching $2,674.20 per ounce in early trading, the highest level for the contract since Dec. 17, 2024.

This came although the US dollar index, which gauges the greenback's strength against a basket of six currencies, increased by 0.75% to 109.28 points at 11:25 pm Makkah time.

David Miller, Chief Investment Officer and Senior Portfolio Manager at Catalyst Funds, said he remains bullish on gold in the new year. “Gold is trading above $2,600 an ounce, and there is good reason to believe the strength in gold in 2024 will carry over into 2025,” he said in a comment to Kitco News.

Miller also believes global central banks are likely to continue to boost their holdings of the yellow metal this year, after their net purchases of gold exceeded 1,000 tons in 2022 and 2023, according to the CME MarketWatch.

Gold is likely to remain bullish in 2025, driven by geopolitical risks and expectations of rising government debt due to a deep fiscal deficit under Trump’s administration, despite potential challenges from slower Fed rate cuts and US dollar strength, said Kyle Rodda, financial market analyst at Capital.com, Reuters reported.