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Gold’s strong performance at the end of 2025 is the result of a combination of macroeconomic factors.
First of all, rising expectations of interest rate cuts have greatly supported gold.
When the market anticipates looser monetary policy, the opportunity cost of gold as a non-interest-bearing asset will decline.
There were reports this week that the Federal Reserve may further cut interest rates in 2026, directly increasing the investment appeal of gold. Secondly, the continued weakness of the U.S. dollar also plays an important role. Since gold prices are priced in U.S. dollars, a weaker U.S. dollar allows buyers in non-dollar regions to obtain gold at a lower cost, thus stimulating demand.
Analysis suggests that the sharp downward trend in the US dollar in 2025 may continue into the next year, strengthening the precious metals market. Third, rising geopolitical risks have led to increased demand for safe havens, including tensions in the Middle East, continued uncertainty in Ukraine-Russia relations, and U.S. actions against Venezuelan oil tankers, all of which are catalysts for rising gold prices. In addition, broader policy uncertainty such as tariff disputes and global market volatility are key factors affecting gold’s potential gains in 2025, which together create a favorable environment for gold as a safe-haven asset.
Despite the positive outlook, there are multiple risks to gold price gains in 2026.
First, a weaker-than-expected rebound in real yields or an easing of monetary policy by the Fed will increase the opportunity cost of holding gold. Second, any potential appreciation of the dollar could depress prices and weaken external demand. In addition, during periods of global risk aversion, investors may be forced to sell gold to cover further losses, which is particularly true when gold prices rise in conjunction with stock markets. Finally, continued weakness in jewelry demand, especially in price-sensitive regions, will lead to a decline in traditional sources of physical demand. At the beginning of the new year, the market’s focus will be on the Fed’s policy dynamics, U.S. economic data, the trend of the U.S. dollar, the pace of central bank purchases, ETF flows, and geopolitical and trade news, all of which will determine the short-term direction of gold. To sum up, gold’s strong performance at the end of 2025 highlights its unique appeal as a global safe-haven asset.
While expectations for 2026 vary, with scenarios ranging from a cooling-off period to the possibility of a breakout to record highs, a combination of structural demand and macroeconomic factors still provide a solid foundation for gold. Investors need to keep a close eye on key catalysts to seize future opportunities in the precious metals market.
Judging from the daily gold chart, gold prices have maintained a strong upward momentum after continuing to rise this week and continue to exceed historical record levels. However, gold prices fell slightly after hitting $4,531, mainly affected by holiday capital outflows. Gold has a lot of power at the moment; it’s currently trending upward, and although there are occasional corrections, the overall trend remains stable. Therefore, it is recommended to hold long positions during a strong uptrend. This week it rose sharply on Monday, rose first, then fell, and then rose again on Tuesday. There was also a rise followed by a fall on Wednesday, hitting a low of $4,450. Therefore, although the upward trend is strong, it is not recommended to break through the top; instead, it is better to wait for the price to correct before taking a reasonable buying position. Gold prices continued to hit new highs on Friday, touching around $4,531, hitting a new daily high, highlighting the strength of this trend.
Although gold prices fell sharply before the weekend’s close, they eventually held support at 4450 and have now hit the 20-day moving average (MA20), so this is a natural pullback. Currently, the short-term moving averages are showing signs of reversing lower. Today, we mainly focus on whether the gold price can quickly return to above 4530. The MACD dead cross signal is also worthy of attention. Today is the last trading day of the week, so be careful when selling and taking profits in the market. Given the strong bullish momentum this week and the high price of gold, this is a very real possibility! The main short-term resistance level is 4530-4550, and the main support level is 4440-4430.
During this period, it is crucial to buy low and sell high. Finally, I wish everyone a successful trading week and a happy weekend! If you have any questions, please feel free to ask!
