The final trading day of 2024 saw relative stability in major markets, with the British pound holding steady against the dollar, gold prices remaining largely unchanged, and oil experiencing moderate gains. Let’s delve into the year-end performance of these key assets.
Table Content:
Pound Sterling Maintains Stability Against Dollar
The pound closed out 2024 at approximately $1.2552 against the US dollar, maintaining a steady position in early European trading. Market sentiment toward sterling remains cautious as investors anticipate a potentially volatile 2025. Karl Schamotta, chief market strategist at Corpay, predicts headwinds for the pound due to domestic economic challenges, potential interest rate cuts by the Bank of England, and external pressures stemming from US policy shifts. While the first quarter of 2025 may prove challenging, Schamotta suggests a potential recovery later in the year, with GBP/USD possibly exceeding $1.30 by year-end. Notably, the pound concludes 2024 as the top-performing major currency against the dollar. The pound also remained stable against the euro, trading at €1.2056.
Gold Prices Remain Flat Ahead of 2025 Economic Data
Gold prices saw little movement in the final trading session of 2024, with spot gold edging up slightly to $2,616.97 per ounce and gold futures rising 0.3% to $2,625.40 per ounce. This muted activity reflects typical holiday trading volume, with investors awaiting upcoming US economic data and policy announcements from incoming president Donald Trump to inform their 2025 strategies. These announcements are expected to shed light on the Federal Reserve’s interest rate outlook for the coming year. Despite the year-end lull, gold is poised to finish 2024 with a substantial 27% gain, its best annual performance in over a decade. This strong performance underscores gold’s enduring role as a safe haven asset amid market turbulence and economic uncertainty.
Oil Prices Rise on Positive Chinese Economic Data
Oil prices experienced moderate gains in the final trading session, buoyed by positive economic news from China and a weakening US dollar. Brent crude futures rose 0.7% to $74.48 per barrel, while US West Texas Intermediate (WTI) crude climbed 0.6% to $71.42. China’s announcement of new economic stimulus measures and a record fiscal stimulus package boosted market sentiment and fueled expectations of increased oil demand. Further optimism stemmed from China’s December Purchasing Managers’ Index (PMI) data, which indicated continued expansion in both the manufacturing and non-manufacturing sectors. While these positive indicators support oil prices, political uncertainties surrounding the incoming Trump administration and the Federal Reserve’s approach to quantitative easing continue to influence market dynamics.
Conclusion
The year 2024 concluded with a relatively calm trading session, setting the stage for a potentially dynamic 2025. While the pound faces challenges, gold maintains its strength, and oil responds to global economic signals, investors are poised for a year of potential volatility and opportunity. Economic data releases and policy decisions in the coming months will be critical in shaping market trends and investor sentiment.
