By Daksh Grover and Sherin Elizabeth Varghese

(Reuters) – Gold prices were set to end a record-breaking year on a positive note on Tuesday as robust central bank buying, geopolitical uncertainties and monetary policy easing fuelled the safe-haven metal’s strongest annual performance since 2010.

rose 0.4% to $2,615.00 per ounce as of 0927 GMT, while U.S. gained 0.4% to $2,627.30.

As one of the best-performing assets of 2024, bullion has gained more than 26% year-to-date, the biggest annual jump since 2010, and last scaled a record high of $2,790.15 on Oct. 31 after a series of record-breaking rallies throughout the year.

“Rising geopolitical risks, demand from central banks, easing of monetary policy by central banks globally, and the resumption of inflows into gold-linked Exchange Traded Commodities (ETC) were the primary drivers of gold’s rally in 2024,” said Aneeka Gupta, director of macroeconomic research at WisdomTree.

The metal is likely to remain supported in 2025 despite some headwinds from a stronger U.S. dollar and a slower pace of easing by the Federal Reserve, Gupta added.

The U.S. Fed delivered a third consecutive interest rate cut this month but flagged fewer rate cuts for 2025.

Donald Trump’s incoming administration was also poised to significantly impact global economic policies, encompassing tariffs, deregulation, and tax amendments.

“Bullion bulls may enjoy another stellar year ahead if global geopolitical tensions are ramped up under Trump 2.0, potentially pushing investors towards this time-tested safe haven,” said Exinity Group Chief Market Analyst Han Tan.

Bullion is often regarded as a hedge against geopolitical and economic risks and tends to perform well in low-interest-rate environments.

“We expect gold to rally to $3,000/t oz on structurally higher central bank demand and a cyclical and gradual boost to ETF holdings from Fed rate cuts,” said Daan Struyven, commodities strategist at Goldman Sachs.

Spot silver was steady at $28.96 per ounce, palladium rose 0.8% to $910.70, and platinum added 0.4% to $904.56.

Silver is headed for its best year since 2020, having added nearly 22% so far. Platinum and palladium are set for annual losses and have dipped over 7% and 17%, respectively.

Investing.com– Gold prices were largely unchanged in Asian trade on Tuesday amid thin year-end trading, although they were set for stellar yearly gains helped by the U.S. Federal Reserve’s interest rate cuts this year.

was largely unchanged at $2,607.65 per ounce, while expiring in February edged 0.2% lower to $2,620.22 an ounce by 00:23 ET (05:23 GMT).

Trading in gold typically sees thin volumes and subdued prices toward the year-end as many institutional traders and market participants close their books ahead of the holiday season.

Gold set for hefty yearly gains

The yellow metal has risen more than 26% in 2024 due to the Fed’s outsized rate cuts earlier this year and geopolitical tensions around the globe.

When interest rates are low, the opportunity cost of holding gold decreases compared to interest-bearing assets like bonds or savings accounts. As a result, investors typically allocate more capital to gold as a store of value and a hedge against uncertainty.

While gold prices rose for most of the year, the Fed’s December meeting acted as a bump after it signaled fewer rate cuts in the upcoming year.

Policymakers forecasted only two more rate cuts in 2025, against precious expectations of four cuts as sticky inflation remained a major concern.

Gold prices had fallen sharply after the Fed meeting and have seen subdued movements since then, reflecting a cautious outlook for next year.

With expectations of fewer rate cuts, the dollar has strengthened further, creating pressure on gold.

A stronger dollar weighs on gold prices as it makes the yellow metal more expensive for buyers using other currencies.

Other precious metals inched lower on Tuesday. edged 0.4% lower to $913.65 an ounce, while inched down 0.3% to $29.315 an ounce.

Copper subdued even as China’s factory activity expands

Among industrial metals, copper prices were subdued as a strong dollar weighed.

The was slightly weaker in Asian trade on Tuesday but remained near a two-year high it reached earlier this month.

Data on Tuesday showed that China’s  expanded for a third straight month in December as a raft of fresh stimulus measures continued to provide support.

However, the rise was slightly lower than market expectations and below the previous month’s reading.

Benchmark  on the London Metal Exchange inched 0.2% lower to $8,925.50 a ton, while February  were largely unchanged at $4.0885 a pound.

Investing.com– Oil prices rose in Asian Trade on Tuesday as Chinese manufacturing activity reading boosted sentiment, while trading was thin on the last day of the year as investors assessed the outlook for the upcoming year.

At 21:05 ET (02:05 GMT),  rose 0.7% to $74.51 a barrel, and  expiring in February also jumped 0.7% to $71.05 a barrel.

Trading volumes were thin ahead of the new year’s start as many institutional investors and traders took time off during the holiday season. Additionally, year-end profit-taking and portfolio rebalancing reduce trading activity. 

Chinese manufacturing data in focus, U.S. ISM survey on tap

China’s manufacturing sector expanded in December but at a slower-than-expected pace, marking its third straight month of expansion as a raft of fresh stimulus measures provided support, data showed on Tuesday.

The outlook for oil demand hinges on the hope that China, the world’s largest oil importer, can revive its economy, especially as there are concerns about a potential oversupply due to expected increases in production from non-OPEC countries.

Markets are awaiting more clarity on Beijing’s plans for stimulus measures in the coming year. Recent reports suggested that the country will ramp up fiscal spending to support economic growth.

Additionally, the U.S. releases the  for December on Friday, and traders will be seeking clues about the strength of economic activity in the world’s largest energy consumer. 

Oil tracks yearly losses on demand outlook concerns

Both contracts were heading for annual declines, with WTI set to slip nearly 1% and dropping on track to lose nearly 4%, as traders remain wary about China’s economic outlook and the possibility of oversupply in the months ahead.

The International Energy Agency (IEA) had recently raised its demand forecast for next year but maintained its projection that the oil market will remain adequately supplied.

Latest Energy Information Administration (EIA) data has shown that U.S. oil production remains near record levels, and the incoming Donald Trump administration is likely to agree to policies that would focus on ramping up domestic fossil fuel production. 

Market participants are also cautious about the broader economic concerns, including weaker-than-expected demand growth in China, traditionally a key driver for global oil consumption. China’s oil demand has been contracting, further underscoring the expected oversupply scenario.

Traders are concerned about the 2025 outlook as rising supply and tepid demand recovery weigh on the balance sheets.