On Wednesday, December 25th, the gold market was closed due to the Christmas holiday; Gold prices remained stable in light holiday trading on Tuesday, as investors looked ahead to the Federal Reserve's interest rate strategy and President elect Trump's tariff policies, which may affect gold's performance next year.

Spot gold fluctuated narrowly on Tuesday, closing up 0.16% at $2616.74 per ounce, with a daily fluctuation of only $11.36.

The current sideways trend seems to be mainly driven by a low liquidity environment, "said Zain Vawda, market analyst at OANDA MarketPulse

Gold achieved brilliant results in 2024 and is expected to achieve its best performance since 2010 with a 27% increase.

A similar upward trend may occur in 2025, but it largely depends on geopolitical developments, "Vawda added." If there are no unexpected geopolitical disruptions, driven by ongoing risks and trade war concerns, the baseline estimate for gold prices is around $2800 per ounce

Analysts have predicted that the historic highs set in 2024 will lay the foundation for a similar upward trend in 2025, driven by the central bank's continued buying, increasing geopolitical tensions, and the Federal Reserve's interest rate cuts.

However, as the US dollar strengthened amidst the Trump frenzy, the rise of gold began to weaken in early November. Because although the Federal Reserve actively cut interest rates in September, November, and December, due to high inflation rates, the Fed has stated that it will reduce the frequency of interest rate cuts in 2025.

The US dollar remained strong in light holiday trading on Tuesday, closing at 108.11, not far from the two-year high of 108.54 set last Friday, as expectations of a slower pace of interest rate cuts by the Federal Reserve compared to other central banks around the world continue to influence market trends.

Since the end of September, the US dollar has risen by over 7%, partly due to increasing market expectations that the US economy will accelerate growth under President elect Trump's policies, while sustained inflation has suppressed market expectations of how the Federal Reserve will actively cut interest rates.

These expectations for the United States are in stark contrast to the growth forecasts and interest rate views of other economies and central banks around the world, leading to a widening interest rate gap.

The path of interest rate cut predicted by the Federal Reserve last week was more cautious than expected by the market, which again boosted the yield of US treasury bond bonds. The yield of 10-year treasury bond bonds reached a seven month high of 4.630% in the middle of Tuesday's session. Ten years ago, the yield on US Treasury bonds was generally considered a risk-free rate, which is the opportunity cost of holding gold. The increase in this yield would suppress the attractiveness of gold.

Joseph Trevisani, Senior Analyst at FX Street in New York, said, "The election has given the market a feeling of a Christmas red envelope, and they are all looking forward to positive things. Of course, the same is true for the US dollar, as we have seen a decline in expectations of further interest rate cuts, and as we all know, the most important factor in the foreign exchange market is the interest rate structure between central banks around the world

As this year draws to a close, trading volume next week may be scarce, and economic data will also be scarce. Analysts predict that interest rates will be the main driving force in the market before the release of the US employment report on January 10th. In addition, investors need to continue to pay attention to the geopolitical situation and news related to Trump.

Trump's return to the White House has brought uncertainty about how his expected tariffs, low tax rates, and immigration restrictions will affect policies.

On the 24th, the Russian Ministry of Defense reported that in the past day, Russian aviation and artillery have attacked the active forces and military equipment assembly areas in 146 regions of the Ukrainian army. The Russian air defense system intercepted 4 Hamas rockets and shot down 65 drones. In addition, the Russian military also attacked several Ukrainian military airports, weapons and ammunition depots, and drone warehouses.

On the same day, the General Staff of the Ukrainian Armed Forces issued a war report stating that as of the afternoon of that day, there had been 179 battles in the front-line areas, and the Ukrainian army continued to take all measures to prevent the Russian attack. Fighting is still ongoing in some areas. According to the war report, in the Kursk region, the Ukrainian army repelled multiple attacks from the Russian army.

On the evening of December 24th local time, the Israeli army bombed a house in the northern part of the Gaza Strip's Beit Hanoun area, resulting in three deaths and multiple injuries.

On the evening of the 24th local time, the Israeli Prime Minister's Office announced that the Israeli delegation participating in the Gaza ceasefire and exchange of detainees agreement negotiations in Qatar will return to Israel that evening and will conduct internal deliberations and discussions with senior Israeli government officials on the details of the negotiations.