Gold Hovers Near US$4,000 As Market Momentum Cools
What’s going on here?
Gold climbed past US$4,000 per ounce on Monday, notching a US$32.90 gain for December contracts and stretching a rally that’s seen prices surge 63% since January 2025 – though the metal is struggling to sustain new highs.
What does this mean?
Gold has dazzled markets this year, peaking at a record US$4,359.40 before dropping closer to US$4,000. That momentum is showing cracks: physical demand has softened after India’s Diwali holiday, and the Federal Reserve pausing on further rate cuts has taken some wind out of bullish sails. At the same time, the US dollar index is at its strongest since July and Treasury yields are climbing, making gold—which doesn’t earn interest—a bit less attractive for now. Still, analysts at Saxo Bank see the recent slip as a healthy cooldown rather than a major setback, pointing to lingering support from fiscal worries and persistent inflation. But if traders stay cautious, a deeper pullback can’t be ruled out.
Why should I care?
For markets: Walking a tightrope in uncertain times.
Gold is being pulled in different directions by shifting financial currents. US Treasury yields are climbing—last week, the 10-year hit 4.115% and the 2-year reached 3.613%—signaling tighter liquidity and a firmer dollar. Combined with softer demand from powerhouse buyers like India, these forces could keep gold trading bumpy in the near future as markets search for direction.
The bigger picture: Staying power still shines through.
Even with short-term bumps, gold’s bigger story hasn’t faded. Persistent inflation, government budget stress, and ongoing buying by central banks continue to make the metal a key hedge for long-term investors. Gold’s track record of resilience will be put to the test as global economic policies and demand patterns keep evolving.
