Gold (XAU/USD) edges lower on the final trading day of 2025, hovering around $4,310 per troy ounce during European hours on Wednesday. Non-interest-bearing precious metals, including Gold, faced pressure following the release of the Federal Open Market Committee (FOMC) December meeting minutes, which highlighted a deeply divided Fed.
Some officials suggested it may be prudent to hold rates steady after three cuts in 2025, while others indicated further rate reductions could be warranted if inflation continues to ease.
Gold on track for record annual gains
Gold is poised for its strongest annual performance in 2025, rising more than 64%. The rally gained momentum in late April after US President Donald Trump announced global tariffs, with additional support coming from robust central bank purchases and growing Gold-backed ETF holdings.
Geopolitical tensions support safe-haven demand
Safe-haven demand for Gold may rise amid escalating geopolitical risks. Hopes for a Russia-Ukraine peace deal have dimmed following alleged strikes on Russian President Vladimir Putin’s residence. Russia vowed to harden its stance in negotiations, while Kyiv denied the accusations as baseless.
In the Middle East, tensions continue to mount with Saudi air strikes in Yemen and Iran’s declaration of a “full-scale war” involving the US, Europe, and Israel. Former President Trump warned of additional strikes if Iran resumes its nuclear programme, adding to fears of regional instability.
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