Gold (XAU/USD) has reclaimed the spotlight, recently hitting its highest level in nearly four weeks. The precious metal’s rally has been fueled by a combination of geopolitical tensions, robust central bank buying, and mounting fears over strict U.S. tariffs under President-elect Donald Trump.
Despite a modest pullback, gold’s resilience continues to reinforce its safe-haven appeal, even as the yellow metal encounters headwinds from robust U.S. labor market data that dampen expectations for aggressive Federal Reserve rate cuts.
At press time, gold continues to climb, trading at $2,668 per ounce—marking a modest 0.24% gain over the past 24 hours. While short-term price compression is evident, the yellow metal remains a standout performer, up 31% over the past year.
As 2025 begins, market participants are closely watching gold’s trajectory in the first quarter, with speculation mounting over its ability to sustain its upward momentum.
ChatGPT predicts Gold price trajectory for Q1 2025
To gauge gold’s potential in the first quarter, Finbold consulted ChatGPT-4o, which predicts that gold prices will hover in the range of $2,700 to $2,750. The AI model highlights several key factors shaping the metal’s performance in the coming months.
Macroeconomic pressures: Dollar strength and monetary policy
ChatGPT identifies the strengthening US dollar and rising Treasury yields as significant headwinds for gold.
The US dollar index has reached a two-year high, while the 10-year Treasury yield has climbed to 4.7%. According to the AI model, these developments diminish gold’s appeal and make yielding assets more attractive in comparison.
The AI model identifies Federal Reserve policy as another critical factor. ChatGPT highlights the cautious tone in the December FOMC minutes, where policymakers emphasized concerns over inflation.
Solid labor market data, such as initial jobless claims dropping to their lowest level since February 2024, reinforces this hawkish stance, limiting expectations for aggressive rate cuts and presenting a challenge for gold.
Global economic and geopolitical influences
The AI model also flags China’s economic slowdown as a key risk. Slowing Consumer Price Index (CPI) inflation, at 0.1% year-on-year in December, and a contraction in the Producer Price Index (PPI) by 2.3%, highlight weakening domestic demand in the world’s largest gold consumer.
ChatGPT suggests this could dampen global demand for gold, even amid ongoing stimulus efforts by Chinese authorities.
Moreover, the potential return of Donald Trump to the White House could reignite global trade tensions, with new tariffs and policy changes likely to fuel economic uncertainty.
ChatGPT notes that such developments could increase demand for safe-haven assets like gold. Additionally, central bank purchases, which significantly boosted gold’s rally in 2024, are expected to continue in 2025, providing a steady source of support for the precious metal.
Against this volatile backdrop of fiscal instability and geopolitical tensions, gold’s role as a reliable safe-haven asset remains intact.
Investors will closely monitor developments in the first quarter of 2025 for signs of whether gold can sustain its upward momentum and set the stage for new milestones in the months ahead.
Featured image via Shutterstock
Source: https://finbold.com/ai-predicts-gold-price-for-q1-2025/