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Biden calls for more weapons to Ukraine after Russia's

Christmas

attack

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Bullion has risen by 28% so far in 2024

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Next year is going to be very volatile for gold- analyst

(Updates with U.S. morning hours)

By Sherin Elizabeth Varghese

Dec 26 (Reuters) - Gold prices rose on Thursday, driven

by safe-haven demand amid light trading volumes following the

Christmas holiday, as markets await signals regarding the U.S.

economy under the incoming Trump administration and Federal

Reserve's rate strategy for 2025.

Spot gold rose 0.7% to $2,633.32 per ounce, as of

10:12 a.m. ET (1509 GMT). U.S. gold futures added 0.6% to

$2,650.20.

"Some of gold's gains had to do with what's going on in

Ukraine with Russia hitting Ukraine's electrical system," said

Daniel Pavilonis, senior market strategist at RJO Futures.

President Joe Biden said on Wednesday he asked the U.S.

Defense Department to continue its surge of weapons deliveries

to Ukraine after condemning Russia's Christmas Day attack

against some of Ukraine's cities and its energy system.

"Gold will still be purchased by central banks, and as

inflation continues, you may see increased demand for gold on

the retail side as well," Pavilonis said adding that prices are

expected to break $3,000 next year.

Gold is considered a hedge against geopolitical turmoil and

inflation, but higher rates reduce the appeal of holding the

non-yielding asset. The yellow metal has gained 28% so far this

year and saw an all-time peak of $2,790.15 on Oct.31.

Next year is going to be a very volatile period for bullion,

the first-half will be positive with heightened geopolitical

tensions while the second half could see some profit-booking,

said Ajay Kedia, director at Kedia Commodities, Mumbai.

As Donald Trump prepares to return to the White House in

January, markets will be closely monitoring U.S. economic data

to gauge how the Fed will navigate the inflationary pressures

anticipated from his administration's policies, including

tariffs, deregulation, and tax reforms.

After aggressively cutting rates in September and November

this year, the Fed persisted with cuts in December but hinted at

fewer reductions in 2025.

Spot silver gained 0.8% to $29.84 per ounce, platinum

fell 0.6% to $938.25 and palladium shed 2.6% to

$929.04.