Pound (GBPUSD=X)

The pound remained steady against the dollar in early European trading on the final day of 2024, hovering around $1.2552. As traders prepare for what is expected to be a volatile 2025, market sentiment towards sterling is cautious.

Karl Schamotta, chief market strategist at Corpay, forecasts a challenging year ahead for the pound, driven by a combination of domestic economic hurdles, potential interest rate cuts, and external pressures, including shifts in US policy.

“We think the Bank of England will cut rates more aggressively than markets anticipate in the near term, limiting the extent to which interest differentials can support the currency against the euro,” Schamotta said. The strategist believes this dynamic will weigh on the pound’s performance, particularly in the early part of the year.

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Despite the expected difficulties, Schamotta points to potential recovery opportunities later in 2025. “While the pound could suffer along with its global counterparts if the greenback extends its recent strength in the first quarter, we expect a recovery to take hold once markets have more soberly evaluated the likely direction of US policy,” he added. As a result, he suggests that GBP/USD could break the $1.30 mark by the year’s end.

The pound is set to end the year as the top-performing major currency against the dollar.

Meanwhile, the sterling was also flat against the euro (GBPEUR=X), at €1.2056.

Gold (GC=F)

Gold prices remained largely unchanged in the final trading session of 2024, as traders held off on major moves ahead of key upcoming economic data.

The spot price of gold edged slightly higher, climbing almost 0.1% to $2,616.97 per ounce, while gold futures rose 0.3% to $2,625.40 per ounce.

With fresh catalysts on the horizon, including next week's US economic reports, market participants are looking for indications that could shape the Federal Reserve’s interest rate outlook for 2025, as well as policies from incoming president Donald Trump.

"I think it's just the holiday thin trade. Perhaps some squaring of the books before year-end," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

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The subdued trading volume is typical of the holiday period, with investors awaiting the new year’s developments to guide their strategies.

Gold is set to finish 2024 with an impressive 27% gain, marking its strongest annual performance since 2010. As a traditional hedge against inflation and economic uncertainty, bullion has benefited from broader market turbulence, though higher interest rates have somewhat dampened its appeal.