Gold market analysis

Gold prices are expected to fluctuate at high levels in the short term. 29/12/25 09:26 Finalized. 

Last Friday, the prices of gold and silver performed strongly. The spot gold price approached $4,550, and the February gold futures even reached as high as $4,584. The increase in silver prices was even greater, with the spot silver price rising by more than 10% in a single day, peaking at $79.3, setting a new historical high. The March silver futures also rose by nearly 7.7%, reaching a high of $79.7. 

The strong performance of gold and silver prices can be attributed to several reasons. The main factors are the Federal Reserve's interest rate cuts and short-term bond purchases, as well as expectations of further rate cuts in the coming year. Currently, the market anticipates at least a half-percentage point cut in interest rates next year. Additionally, expectations of a dovish monetary policy stance from the next Federal Reserve chair have put pressure on the US dollar, further fueling the rise in precious metal prices. However, the sharp increase of over 10% in the price of silver in a single day has made the price severely overbought. Some market analysts predict that the price of silver could fall to $42 next year. The rally in gold and silver prices at the end of 2025 is indeed unusual and irrational, and a significant correction is not unexpected. 

A casual friend seems to be taking advantage of the thin trading volume to liquidate his position. 

On the first trading day after the Christmas holiday, the prices of gold and silver plunged sharply in the early Asian session. Gold opened with a gap up at a high of $4,549 before plummeting. It fluctuated down to the $4,472 level before gradually recovering. From the hourly chart, gold re-entered above $4,500 and the 50SMA ($4,503), but this morning's gap up opening and low closing formed a bearish engulfing candlestick pattern, and a small double top formation with last week's high. Unless the sharp drop this morning was due to short sellers taking advantage of the thin trading volume after the holiday and in the early Asian session to liquidate their long positions, the short-term top of gold prices may have been formed. Gold needs to break through $4,560 to maintain its upward trend. 

If the gold price can hold above $4,500 again, it is expected to consolidate first within the range of $4,500 to $4,560, and then make an attempt to break through upward. Conversely, if it falls below $4,500, the possibility of testing $4,460 will increase. The fluctuation range this morning has almost covered two Gann angles (4,460 to 4,510 and 4,510 to 4,560). Unless there is a one-sided decline in the gold price, it is highly likely that it will remain within the aforementioned broad range today. 

The above content is for reference only and does not constitute investment advice.