Gold rallies ahead of Central Bank rate decisions and post-Syria tensions

Gold prices rose for the past two trading days, fuelled by mounting haven demands and China's renewed gold purchases. Expectations for further rate cuts by major central banks have also contributed to the precious metal’s upside momentum. The gold rally extended into the Asian session on Wednesday, with gold futures on the Comex climbing 0.71% to $2,737 (€2,603) per ounce as of 5:12 am CET.

Over the weekend, Syria's rebel army captured the capital, Damascus, ending Assad's 50-year regime. The political shift, combined with the ongoing Middle East conflicts have heightened global political and economic uncertainties, boosting demand for traditional safe-haven asset gold. A similar surge was also seen in late November amid a major war escalation between Ukraine and Russia.

On Monday, Chinese top officials pledged to adopt "a more proactive fiscal policy", in 2025. Analysts expect the world's second-largest economy to impose more easing policies through rate cuts, raising deficits, and increasing government borrowings.

Additionally, the People's Bank of China said it resumed buying gold reserves in November after a six-month hiatus. 

Ray Jia, head of research for China at the World Gold Council, noted in a recent report that gold demand in China is expected to stabilise in 2025, supported by anticipated rate cuts and heightened economic pressure amid Trump's tariff threats. 

Investors will be closely watching major central banks' rate decisions for the remainder of the week, with widespread expectations of further monetary easing. The Bank of Canada (BoC) is expected to lower its policy rate by 50 basis points later today, while the Swiss National Bank (SNB) and the European Central Bank (ECB) are anticipated to deliver 25