Gold traded with a modest increase above the $2,620 level at the opening after the New Year's Holiday as uncertainty over Donald Trump's tariff policy, geopolitics and the attraction of central banks' buying support the yellow metal.
However, the Fed still maintains a cautious stance that may limit gold's rise.
At 9.15 am, gold prices were at $2,632.96, up 0.28% since it opened in early trading on Thursday in the Asian session.
Market participants are now waiting for new catalysts that can influence the Fed's interest rate outlook in 2025 after Jerome Powell, in his speech at the December meeting, signaled that they are taking a cautious step to extend interest rate cuts.
This could provide some support to the US dollar and affect the positive trend for gold.
Meanwhile, the release of the US Initial Jobless Claims in New York tonight will offer some clues about the state of the labor market and on Friday, the S&P Global Manufacturing PMI for December.
The uncertainty surrounding Donald Trump's upcoming policies could provide a significant direction for gold.
Geopolitical tensions in the Middle East and the ongoing Russia-Ukraine conflict are expected to remain elevated, which could increase safe-haven flows to the commodity.
According to a World Gold Council survey, major central banks are likely to buy more gold over the next 12 months.
