Gold prices rose on Thursday, driven by safe-haven demand amid light trading volumes following the Christmas holiday, as markets await signals regarding the U.S. economy under the incoming Trump administration and Federal Reserve's rate strategy for 2025.

Spot gold rose 0.7% to $2,633.32 per ounce. U.S. gold futures added 0.6% to $2,650.20.

"Some of gold's gains had to do with what's going on in Ukraine with Russia hitting Ukraine's electrical system," said Daniel Pavilonis, senior market strategist at RJO Futures.

President Joe Biden said on Wednesday he asked the U.S. Defense Department to continue its surge of weapons deliveries to Ukraine after condemning Russia's Christmas Day attack against some of Ukraine's cities and its energy system.

"Gold will still be purchased by central banks, and as inflation continues, you may see increased demand for gold on the retail side as well," Pavilonis said adding that prices are expected to break $3,000 next year.

Gold is considered a hedge against geopolitical turmoil and inflation, but higher rates reduce the appeal of holding the non-yielding asset. The yellow metal has gained 28% so far this year and saw an all-time peak of $2,790.15 on Oct.31.

Next year is going to be a very volatile period for bullion, the first-half will be positive with heightened geopolitical tensions while the second half could see some profit-booking, said Ajay Kedia, director at Kedia Commodities, Mumbai.

As Donald Trump prepares to return to the White House in January, markets will be closely monitoring U.S. economic data to gauge how the Fed will navigate the inflationary pressures anticipated from his administration's policies, including tariffs, deregulation, and tax reforms.

After aggressively cutting rates in September and November this year, the Fed persisted with cuts in December but hinted at fewer reductions in 2025.

Spot silver gained 0.8% to $29.84 per ounce, platinum fell 0.6% to $938.25 and palladium shed 2.6% to $929.04.(Cay) Newsmaker23

Source: CNBC