The price of gold is once again approaching its all-time high following a week of significant activity. This upward movement is being fueled by a combination of factors: a notable surge in futures market activity and a spectacular rally in the silver market. The key question for investors is the sustainability of this bullish trend.
Futures and Physical Demand Provide Foundation
A primary catalyst for gold’s current strength originates in the US futures market. The total number of open futures contracts, known as Open Interest, has risen substantially to 462,572 contracts—an increase of 7.5 percent. Technical analysts view rising prices accompanied by growing Open Interest as a confirmation of a healthy uptrend, indicating the influx of fresh capital.
Concurrently, robust physical demand is providing underlying support. For the December delivery month, requests stand at 28,437 contracts, equivalent to approximately 88 tonnes of gold. At the same time, COMEX warehouse inventories have declined by roughly 350,000 ounces. This pairing of heightened demand with falling stockpiles points to a tangible tightening in the physical market segment.
Monetary Policy and Institutional Forecasts
Monetary policy from the US Federal Reserve is offering additional tailwinds. During the week ending December 11, the central bank implemented its third interest rate cut of the year. Lower benchmark rates reduce the opportunity cost of holding non-yielding assets like gold, enhancing its appeal compared to interest-bearing securities such as bonds.
Major financial institutions are already setting their sights on 2026. Goldman Sachs has reaffirmed a price target of $4,900 per troy ounce by the end of 2026. A core part of their thesis is that gold ETFs currently represent a mere 0.17 percent of US investment portfolios. Analysts see substantial room for growth should institutional fund allocations to this sector increase.
ING also anticipates the bull market to continue, forecasting an average gold price of $4,325 for 2026. The bank’s experts cite structural drivers including geopolitical tensions and the strategic accumulation of gold reserves by central banks. For instance, the value of Russia’s gold holdings has grown by $112 billion over a twelve-month period.
Silver’s Spectacular Run Lends Support
Beyond gold’s own dynamics, silver is injecting further momentum into the precious metals complex. This week, the metal decisively broke through the $60 mark for the first time, setting a new record high at $62.89. Since the start of the year, its performance has exceeded 120 percent.
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This powerful advance is drawing increased attention and capital to the entire precious metals sector. Market observers interpret silver’s breakout above $60 and its historical relationship with oil as signals that institutional investors are broadly accepting these higher price levels—a sentiment that indirectly benefits gold.
Technical Perspective and Price Action
Gold concluded the trading week firmly in positive territory, with the spot price settling at $4,329.80 per ounce on Friday. This places it at its highest level in the past twelve months, precisely at its 52-week peak. The weekly gain amounts to 2.42 percent, while the 30-day increase stands at 3.06 percent.
From a technical standpoint, the market exhibits a solid upward trajectory:
- Friday’s closing price: $4,329.80
- 52-week range: $3,941.30 to $4,329.80
- Distance from 52-week low: nearly 10%
- RSI (14-day): 57.7 – indicating no extreme overbought condition
- 30-day volatility (annualized): 14.45%
With the RSI reading slightly below 60, the current advance does not appear overheated. The moderate volatility level suggests the climb has been orderly rather than driven by panic.
The market’s ability to consolidate above the $4,250 zone is being interpreted as a sign of underlying strength. Recent pullbacks have been fully recovered, keeping the area around the record high in clear focus. Chart analysis suggests that a sustained break above the $4,380 region would open up technical targets around $4,440.
As long as key support levels—notably the area around the short-term moving average (SMA20) and the recent intermediate low well above $4,000—remain intact, the bullish setup prevails. The market is thus entering a phase where a decisive breakout to a new record or a renewed period of consolidation will likely determine the next directional move.
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