While silver has already surged to new peaks, the gold price is gathering momentum for a fresh assault on its all-time high. After a brief consolidation, buyers have returned with force, propelled by a potent combination of aggressive central bank acquisitions and imminent interest rate cuts. Is the decisive breakout above historic levels now imminent?
A Constructive Macroeconomic Backdrop
The current rally is built on a foundation of concrete, supportive factors. Market expectations are now overwhelmingly pricing in a shift toward easier monetary policy from the U.S. Federal Reserve. This outlook acts as jet fuel for the precious metal, which carries no yield and becomes more attractive as interest rates fall.
Further support stems from economic concerns. Recent data shows the U.S. manufacturing sector has now contracted for nine consecutive months. Such weakness tends to pressure the U.S. dollar while boosting the appeal of gold as a traditional safe haven. The metal has climbed to $4,238.70, bringing it within striking distance of its 52-week high of $4,265.00. It now sits a mere 0.7% below its ultimate record peak.
Central Banks Drive Structural Demand
A critical and often overlooked driver is the relentless physical buying by global central banks. In October alone, these institutions purchased 53 tonnes of gold. This represents a massive 36% jump from the previous month and marks the highest monthly total for the year 2025. This “smart money” accumulation, led by entities like Poland’s National Bank, creates a solid floor for the price, independent of daily speculative trading.
Should investors sell immediately? Or is it worth buying Gold?
The situation in the related silver market underscores the physical demand theme. As gold consolidates, silver has already broken into new record territory. A genuine physical shortage is emerging, with warehouse inventories in Shanghai plunging to a ten-year low. China is exporting record volumes to London to alleviate supply bottlenecks there.
The Path to New Records
Tuesday’s pullback proved short-lived, quickly revealed as a classic bear trap. Profit-taking following a six-week high provided only a temporary dip, which was promptly bought. All eyes are now fixed on the Federal Reserve’s upcoming policy meeting on December 9th and 10th.
However, key economic releases before that meeting could set the tone. The ADP employment report on Wednesday and the crucial PCE inflation data on Friday are poised to deliver significant market-moving impulses.
Adding further speculative fuel is the political sphere. Reports suggest U.S. President Trump plans to install Kevin Hassett, known for his preference for low interest rates, as Fed Chair in 2026. This macro environment remains highly constructive for gold. The question for many market participants appears to have shifted from if the record will fall to when.
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