The precious metal continues its relentless record-breaking ascent, defying typical holiday trading patterns. While many U.S. traders departed for the extended Thanksgiving weekend, remaining market participants aggressively bought, driving prices to new heights. This unusual pre-holiday surge raises critical questions about whether the rally reflects genuine fundamental strength or presents a potential trap for unwary investors.

Technical Breakout Defies Thin Trading Conditions

Friday’s trading session revealed a significant market anomaly. Despite traditionally low liquidity on “Black Friday” as institutional players enjoy the long weekend—conditions that often trigger erratic price swings or profit-taking—the current dynamic tells a different story. Every minor price dip is being immediately purchased, demonstrating remarkable underlying strength.

From a chart perspective, bullish investors have established clear dominance. The psychologically crucial $4,200 threshold, recently identified by analysts as a major resistance barrier, wasn’t merely tested but decisively breached. With spot prices reaching $4,221.30, gold is trading precisely at its 52-week high, confirming its status as the preferred safe-haven asset amid ongoing macroeconomic uncertainty. Technical analysts suggest that as long as support around $4,150 holds firm, the path of least resistance remains decidedly upward.

Dollar Weakness and Rate Expectations Fuel Rally

The primary engine behind gold’s powerful advance continues to be shifting U.S. monetary policy expectations. Markets are currently pricing in a high-probability scenario: the Federal Reserve will implement interest rate cuts as soon as December. Market-implied probability for this action has surged to approximately 80%.

Should investors sell immediately? Or is it worth buying Gold?

This aggressive positioning follows a series of disappointing U.S. economic indicators, with particularly weak retail sales figures adding substantial momentum to speculation. Investor rationale appears straightforward: a faltering economy will compel the Fed to intervene. This growing conviction has placed the U.S. dollar under significant selling pressure. A weaker greenback automatically makes dollar-denominated gold cheaper for international buyers, creating direct upward price momentum.

Several key factors are currently reinforcing the rally:

• Monetary Policy Shift: Anticipated cheaper money in December dramatically enhances the appeal of non-yielding assets like gold.
• Historic Performance: With an annual gain approaching 60%, 2025 is shaping up to be one of gold’s strongest years since 1979.
• Physical Demand: Seasonal patterns, including India’s wedding season, provide solid underlying price support.
• Technical Momentum: The breakthrough above critical resistance levels has unleashed fresh bullish energy.

This powerful combination of technical breakout momentum and fundamental policy expectations suggests the gold market may maintain its upward trajectory in the near term.

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