A powerful combination of monetary policy shifts, currency movements, and sustained demand is propelling gold to multi-week highs. The precious metal is now testing a critical technical threshold, with market participants watching to see if it can decisively break through to record territory.

Key Market Developments

• The U.S. Federal Reserve implemented its third consecutive interest rate cut of 2025, bringing the total reduction for the year to 75 basis points.
• Gold traded near a record high of $4,372.60 per ounce, closing most recently at $4,329.80.
• The U.S. Dollar Index fell to a two-month low, boosting international purchasing power for dollar-denominated gold.
• Global central banks purchased 53 tonnes of gold in October, marking the strongest monthly increase since November 2024.
• Gold-backed exchange-traded funds (ETFs) recorded inflows of 21.8 tonnes in November.
• The 52-week trading range stands between a low of $3,941.30 and the high of $4,372.60 (recorded on December 15, 2025), representing a roughly 11% spread from the low.
• Technical indicators show a 14-day Relative Strength Index (RSI) of 57.7, with 30-day annualized volatility at a moderate 12.38%.

Monetary Policy and Currency Dynamics Provide Thrust

A clear pivot in U.S. monetary policy is a primary engine for gold’s advance. The Federal Reserve’s latest 25-basis-point cut brings the cumulative easing for 2025 to 0.75 percentage points. Chairman Jerome Powell’s accompanying remarks effectively ruled out the possibility of future rate hikes.

This environment offers a dual tailwind for bullion. Firstly, non-yielding assets like gold become comparatively more attractive as returns on safe-haven bonds decline. Secondly, the policy decision triggered significant dollar weakness, sending the greenback to an eight-week low against a basket of major currencies. For international buyers, a softer dollar makes gold cheaper in their local currency terms.

Market action unfolded in stages. Immediately following the Fed’s announcement, gold added approximately $30 per ounce. It then breached the $4,270 level with minimal resistance the following day, peaking at $4,349 on Friday before profit-taking emerged. For the week, the metal secured a gain exceeding 2%. With inflation persisting above the Fed’s 2% target, historical patterns suggest that rate cuts in such an environment often provide underlying support for gold prices.

Robust Physical and Investment Demand

Beyond macroeconomic factors, tangible demand from major institutions is adding fundamental strength. The 53-tonne central bank acquisition in October featured significant buying from several nations:
– The National Bank of Poland: +16 tonnes
– The Central Bank of Brazil: +16 tonnes
– The Central Bank of Uzbekistan: +9 tonnes

This activity reinforces a longer-term strategy among reserve managers to diversify holdings and establish gold as a strategic asset.

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The investment landscape is also shifting. After periods of outflows, gold ETFs are seeing renewed interest, with the November influx of 21.8 tonnes bringing total holdings to 3,915.2 tonnes. Notably, ETF volumes in China have more than doubled this year. This resurgent investor appetite, combined with steadfast physical demand, provides a solid foundation for the ongoing uptrend.

Precious Metals Complex Shows Broad Strength

The positive sentiment extends beyond gold. Silver broke through the $64 per ounce barrier for the first time, setting a fresh record at $64.64 before also experiencing some consolidation. Tight physical supplies and steady industrial consumption, particularly from the solar and electronics sectors, are supporting silver.

Simultaneously, platinum climbed to a 14-year peak. The collective strength across the precious metals sector hints at a broader rotation into tangible assets.

Technical Perspective and Forward Path

From a chart analysis standpoint, gold’s immediate focus is the October all-time high of $4,381.58. The recent close at $4,329.80 places this level within striking distance. The RSI reading of 57.7 indicates the metal is neither overbought nor oversold, leaving room for potential further advances.

In the near term, upcoming U.S. economic releases will likely set the tone. On December 16, delayed Non-Farm Payrolls data for October and November, alongside the November Consumer Price Index, will be published. These figures could recalibrate market expectations for the monetary policy path into 2026. While the Fed’s current projections signal only one additional rate cut for next year, market pricing anticipates two.

A clear and sustained breakout above the $4,381.58 record would provide technical confirmation of the current bullish trend. Should the metal fail to achieve this, a consolidation phase appears more probable as the market fully digests the implications of recent Fed actions and incoming economic data.

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