Gold prices edged higher in early Friday trading following a 1 percent gain in the previous session, bolstered by increased safe-haven demand. Investors are now focused on the Federal Reserve's stance on interest rates and the impact of trade tariffs proposed by US President-elect Donald Trump.

Price update

Spot gold rose 0.1 percent to USD 2,660.25 per ounce, recovering from a two-week low reached on Thursday. US gold futures gained 0.2 percent, trading at USD 2,673.90 per ounce.

For the week, gold posted a 1.5 percent increase, solidifying its position as one of the best-performing assets of 2024, with an annual gain exceeding 27 percent—the largest since 2010.

Factors supporting gold

Gold continues to serve as a hedge against geopolitical and economic uncertainties. Geopolitical tensions intensified following Israeli airstrikes on Gaza that killed 67 Palestinians on Thursday.

In Ukraine, Russian drone strikes on Kyiv caused material damage in at least two districts.

Meanwhile, robust US economic data highlighted the labor market's strength, with jobless claims falling to an eight-month low last week.

The Federal Reserve delivered its third consecutive rate cut in December, with expectations of only two additional cuts in 2025.

Performance of other precious metals

Other precious metals showed mixed performance. Silver edged down 0.1 percent to USD 29.54 per ounce, platinum held steady at USD 923.09, and palladium dropped 0.2 percent to USD 909.74, according to Reuters data.