Source: Euronews

Gold prices, which surged dramatically throughout last year, are poised to continue their ascent in the months ahead, sparking heightened interest and anticipation among investors.

Experts suggest that escalating macroeconomic uncertainties — driven by the anticipated inauguration of the Donald Trump administration, intensifying U.S.-China tensions, and ongoing conflicts in the Middle East and Ukraine — are fueling a growing preference for safe-haven assets.

They also advise that this may be an opportune time to buy gold, anticipating continued price increases.

Gold prices on the New York Mercantile Exchange surged from $2,071.8 per ounce at the start of 2024 to $2,621 per ounce on Dec. 31, the year's final trading day — an impressive 26 percent increase. This marks the largest annual gain recorded in the 21st century.

The gold price rally was attributed to a buying spree by central banks worldwide throughout the year, coupled with geopolitical uncertainties.

“Following the asset freeze measures imposed on the Russian central bank by Western countries in response to Russia's invasion of Ukraine in 2022, net gold purchases by central banks have significantly increased, particularly in emerging markets,” Lee Yoon-ah, a researcher at the Bank of Korea, said.

“Recently, Eastern European countries such as Poland, the Czech Republic and Hungary have also been increasing their gold purchases as a precaution against potential instability in the U.S. dollar system.”

According to a survey conducted by the World Gold Council in June last year, 29 percent of central banks from 68 nations indicated their intention to increase gold reserves over the next 12 months. This marks the highest proportion since the council began conducting the survey in 2018.

Global investment banks, including JP Morgan and Goldman Sachs, also predicted that gold prices will continue to soar in 2025, setting a target price of $3,000 per ounce.

A key factor driving the anticipated rise in gold prices this year is the U.S. Federal Reserve’s expected interest rate cuts.

Since gold does not generate interest income, higher interest rates usually make bonds more attractive than gold, while lower interest rates tend to boost demand for gold as an investment.

Accordingly, analysts suggest that funds from money market funds, which primarily invest in short-term government bonds, are likely to flow into the gold market as the Fed reduces interest rates.

“The outlook for strong gold prices remains intact. While a potential ceasefire between Russia and Ukraine could negatively impact gold prices, the Fed’s rate-cutting stance is expected to favorably support them,” Mirae Asset Securities analyst Park Hee-chan said.

“The belief that de-dollarization efforts led by China and Russia will provide long-term support for gold prices remains unchanged.”

NH Investment & Securities analyst Hwang Byung-jin said, “As long as the Fed does not revert to a tightening monetary policy, the bullish cycle for gold remains valid. However, with some uncertainties lingering until Trump’s inauguration as U.S. president, short-term gold investments are advised to follow a strategy of buying on dips during market corrections.”

Source: Koreatimes

(Jan 3): US President-elect Donald Trump called to "open up" the North Sea and get rid of windmills in a post on his social media platform Truth Social on Friday.

Oil companies have been steadily exiting the North Sea in recent decades with production declining from a peak of 4.4 million barrels of oil equivalent per day at the start of the millennium to around 1.3 million boed today.

Trump's post was in response to a report about US oil and gas producer APA Corp's unit Apache's plans to exit North Sea by year-end 2029. The company expects North Sea production to fall by 20% year over year in 2025.

In October last year, the British government said it would increase a windfall tax on North Sea oil and gas producers to 38% from 35% and extend the levy by one year. The government wants to use the revenue from oil and gas to raise funds for renewable energy projects.

Britain has a target to largely decarbonise its power sector by 2030 which will mean reducing its reliance on gas-fired power plants and rapidly increasing its renewable power capacity.

North Sea producers have warned that the higher tax rate could lead to a sharp drop in investments and are exiting from the ageing basin ahead of the new tax increases.

Top British North Sea producer Harbour Energy wants to sell stakes in North Sea oilfields and is reviving plans for a US listing, Reuters has previously reported. US oil major Exxon completed its exit from the North Sea region in July last year.

The North Sea has seen major wind farm development by Britain and European countries, but the rapidly-growing offshore wind sector has had a tough few years as costs ballooned due to technical and supply chain problems as well as higher interest rates, leading many companies to review investments.

Companies are reconsidering their investments in offshore wind, or have assumed impairments, due to the rising cost of developing wind farms that can be more than 100km (62 miles) offshore.

Orsted, the world's biggest offshore wind farm developer, trimmed its investment and capacity targets last year.

Source: The Edge Markets

Source: AP

The Federal Reserve cut interest rates in December but indicated it would likely only cut rates on two more occasions in 2025. This puts the Fed firmly in the slow lane regarding rate cuts, which can bolster the U.S. currency.

Above: Only the USD outperformed the GBP in 2024.

Source: Poundsterlinglive

The EUR/USD pair pauses its four-day losing streak, trading near 1.0270 during the Asian session on Friday. A review of the daily chart suggests a persistent bearish bias, with the pair moving downward within a descending channel pattern.

The 14-day Relative Strength Index (RSI), a crucial momentum indicator, hovers near the 30 level, indicating an oversold condition and the possibility of an upward correction in the near term. However, the nine-day Exponential Moving Average (EMA) remains below the 14-day EMA, signaling weaker short-term price momentum and reinforcing the overall bearish sentiment.

The EUR/USD pair could find the primary resistance level around the nine-day Exponential Moving Average (EMA) at 1.0350, followed by the 14-day EMA at 1.0379. If the pair breaks above these levels, it could aim for the descending channel's upper boundary at 1.0470, with further gains potentially extending to the seven-week high of 1.0630.

On the downside, the EUR/USD pair may navigate the region around the psychological support level of 1.0000, followed by the lower boundary of the descending channel at 0.9970. A decisive break below 0.9970 could intensify the bearish bias, potentially driving the pair further down to test 0.9730, the lowest level seen since November 2022.

EUR/USD: Daily Chart

Source: FXSTREET