Gold market rises with central bank strategies

In the final two months of the year, the average daily trading volume in the gold market reached 500 billion dollars, while the daily volume for silver rose to 100 billion dollars during the same period. In gold's price movements, the reserve management of major central banks, in particular, is proving decisive. Experts state that the shaping of assets by central banks in the gold market brings stability to the market.

In the silver market, however, the dominance of a shallower structure leads to individual investors having a significant impact on prices. It is noted that the sharp price fluctuations observed in precious metals during this period are also influenced by the fact that they coincide with a challenging time of year when liquidity is low.

INTEREST RATE CUTS WILL CONTINUE

It is reported that the three interest rate cuts made by the Fed in 2025 have increased the appeal of gold and silver, which are assets that lack interest yields. Experts predict that interest rate cuts will continue in the coming year. It is noted that these dynamics reduce the opportunity cost for precious metals.

The term of American Central Bank Chair Powell ends in May. On the other hand, President Trump's statements in the US such as "The name is clear. I will announce it in January. I might fire Powell" have increased concerns in the markets regarding central bank independence.

As will be recalled, a rally began in the gold market following the dismissal of the head of the US Bureau of Labor Statistics in August. It is emphasized that such developments could have an impact on long-term investments.

One of the biggest risks awaiting financial markets at the beginning of the new year stands out as the decision the US Supreme Court will make regarding customs duties. The probability of this risk occurring was measured at 70 percent yesterday in betting markets. President Trump, meanwhile, announced that he would introduce new taxes if current tariffs were canceled. Additionally, Greenland being brought back onto the agenda by the US administration is increasing geopolitical uncertainties.

In light of all these developments, experts point out that the structural support elements in the precious metal markets remain in place and that gold and silver maintain their importance in investors' portfolios.

News Source: 12punto