Gold posts modest gains above $2,600, focus on Trump policies

The price of gold trades with mild gains to around $2,625 in the early Asian session on Thursday.

The uncertainties around Donald Trump’s tariff policies, geopolitical risks, and central bank buying support XAUUSD. Nonetheless, the cautious stance of the Federal Reserve might cap the yellow metal’s upside.

Traders awaited for fresh catalysts that could influence the Fed’s interest rate outlook this year.

In December, Fed Chair Jerome Powell signaled a cautious stance on further rate cuts after delivering a 25 basis points (bps) reduction. This, in turn, could provide some support to the greenback and undermine the USD-denominated commodity price.

The release of the US weekly Initial Jobless Claims on Thursday might offer some hints about America’s labour market condition, On Friday, the US S&P Global Manufacturing PMI for December will be in the spotlight.

On the other hand, uncertainties surrounding policies from incoming President Donald Trump could lift the precious metal.

Additionally, geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict are expected to remain high this year, which could boost the safe-haven flows, benefiting the price of gold.

An increase in central banks’ gold demand might contribute to the precious metal metal’s upside.

According to the World Gold Council survey, major central banks are likely to purchase more gold in the next 12 months, which should further bolster demand for the yellow metal.

(Source: OANDA)