Analyst explained the rise in the value of gold futures

The rise in the cost of gold futures is caused by the uncertainty associated with the entry into office of U.S. President Donald Trump, Olga Veretennikova, vice president of the analytical company Borsell, told Izvestia on January 10.

Earlier in the day, the price of gold futures rose above $2700 per troy ounce during trading on the Comex exchange.

"The growth in the cost of gold futures is caused by the uncertainty associated with the entry into office of U.S. President Donald Trump, which will be held on January 20, and geopolitics, especially in terms of escalating military conflicts. In this regard, investors are expecting a potential escalation of the trade war, which may lead to an increase in risks in the system and an active movement of capital into protective assets," Veretennikova explained.

According to her, many investors are waiting for new data from the U.S. Nonfarm Payrolls (Nonfarm Payrolls) employment report, which will allow to assess the prospects for a Fed rate cut.

"The current forecast for job growth in the non-farm sector in December looks pessimistic and is expected to be only about 160 thousand compared to 227 thousand in November, according to most analysts," the expert said.

According to the expert, if the growth of jobs will be higher, gold prices may correct downward a little. Now the market is in risk on mode, which implies that investors are more inclined to risk, which is accompanied by an increase in prices for certain assets.

According to the World Gold Council (WGC), in 2025 the growth of gold prices will be restrained due to such factor as inflation. In addition, investor demand will be extremely volatile due to the trade wars that Trump is going to unleash, as well as the uncertain situation with interest rates, the analyst specified.

"Trump's policy may give a boost to the US economy, but at the same time also cause a fair amount of nervousness among investors. Despite the expected slowdown in gold prices, the asset may rise to levels of $2900-3000 per ounce by the end of 2025," Veretennikova added.

In 2024, gold became one of the most profitable major commodities, showing growth of 27%. Quotes of the precious metal several times updated the historical record on the background of the Fed rate cut, the increase in gold reserves of major central banks, as well as demand for gold from investors amid geopolitical tensions and instability.

The current dynamics in the gold market indicates a high level of volatility, which may affect the investment strategies of market participants. The growth in the price of gold in the current week occurred despite the strengthening of the U.S. dollar and rising yields on U.S. Treasury bonds, which is usually considered a deterrent to the growth of the cost of gold, the expert concluded.

Last year, on November 21, portfolio manager of Alfa Capital Management Company Dmitry Skryabin expressed his opinion in a conversation with Izvestia that in 2025 the cost of gold may reach $3 thousand per troy ounce. The main factors that could move gold prices upward are geopolitics and the expectation of further rate cuts by the Federal Reserve System, the expert added.