Gold prices rose sharply at the start of the week, reaching
a new record. According to live pricing data, spot gold was trading around
$4,420 per ounce, up more than 1.7 percent on the day.
Weaker Dollar and Geopolitical Risks Support Gold
Market participants pointed to U.S. monetary policy
expectations as a key driver. Anticipation of further interest rate cuts by the
U.S. Federal Reserve lifted demand for safe-haven assets. Lower yields
typically support gold, which does not offer interest income.
A weaker U.S. dollar also supported prices. When the dollar
falls, gold becomes cheaper for holders of other currencies, which tends to
increase demand.
Ongoing geopolitical uncertainty added to the metal’s appeal,
as investors sought protection against broader market risks, according to
Reuters.
Kathleen Brooks, Research Director at XTB, noted that risk
assets were also moving higher. She said, “Tech stocks are leading this ‘Santa
Rally.’” She added, “Commodities are also surging.”
Referring to gold, she said, “The gold price hit a fresh
record high on Monday and is above $4,400, as geopolitical concerns heat up and
hopes grow that the Fed can continue to cut rates next year as US inflation
moderates.”
She also noted that gold is “rounding off the strongest annual
performance for the yellow metal in four decades.”
Gold priceOne year ago: $2607Now: $4382 pic.twitter.com/I87yy2gtm7
— The Spectator Index (@spectatorindex) December 22, 2025
Gold Outlook Remains Positive Long-Term
Despite the strong momentum, some analysts urged caution in
the near term. They warned that lower trading volumes during the holiday period
could increase volatility. Thin liquidity can lead to sharper price swings in
both directions, and a short-term pullback cannot be ruled out.
Read More: Market
Moving Events in 2025: Five Defining Trends – And One Prediction for 2026.
Looking further ahead, longer-term forecasts remain broadly
positive. Several strategists expect gold prices to move higher over the coming
years, citing sustained central bank demand, geopolitical risks, and a gradual
easing cycle in major economies as supporting factors.
For now, gold continues to draw support from a combination
of macroeconomic and geopolitical forces. The move keeps the metal at the
center of investor focus as the year draws to a close.
This article was written by Tareq Sikder at www.financemagnates.com.
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