Gold (XAU) Silver (XAG) Prices: Will Economic Recovery Boost Prices Further?

LONDON (January 2) Gold prices (XAU/USD) extended their bullish momentum, trading near $2,633.83 and reaching an intra-day high of $2,636. This rise reflects a combination of monetary easing, heightened geopolitical risks, and record central bank demand. According to the World Gold Council, 2024 saw a 27% increase in Gold prices, marking its best annual performance since 2010, driven by lower interest rates and growing uncertainties.

A weaker US Dollar, trading at approximately 108.30, further supports Gold. As the Dollar loses strength, Gold becomes more affordable for foreign investors, boosting its appeal. Additionally, China’s economic recovery is expected to provide tailwinds for Gold in 2025. President Xi Jinping’s commitment to growth has raised expectations for stimulus measures, despite recent slower manufacturing growth.

Silver Benefits from Safe-Haven Demand and Economic Optimism

Silver (XAG/USD) mirrored Gold’s upward trajectory, trading at $29.33 with an intra-day high of $29.36. Its affordability relative to Gold makes it an attractive option for investors seeking safe-haven assets amid global uncertainties. Central bank interest, coupled with the weakening Dollar, adds further support to Silver prices.

China’s improving economic outlook and recovering construction and service sectors are also driving demand for industrial metals like Silver. As a dual-purpose metal, Silver benefits from both its industrial and safe-haven qualities, positioning it for continued growth.

Geopolitical Tensions and Central Bank Actions Drive Prices

Persistent geopolitical risks, including escalating tensions in Eastern Europe and the Middle East, have heightened demand for safe-haven assets. Russia’s drone strikes on Ukraine and military operations in Gaza have amplified global uncertainties, steering investors toward Gold and Silver.

Central bank purchases remain a cornerstone of support for precious metals. The World Gold Council forecasts sustained buying in 2025, reinforcing upward momentum for both Gold and Silver as investors navigate an environment marked by geopolitical instability and economic recovery.

Short-Term Forecast

Gold prices hover near $2,633.83, testing resistance at $2,652.90 amid bullish momentum. Silver trades at $29.32, eyeing $29.88, supported by strong demand.

FXEmpire