🏆 GoldTrack Weekly Newsletter

Week Ending December 5, 2025

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✨ Executive Summary

Gold surged to close the week at $4,212/oz, up 1% on Friday and consolidating above the critical $4,200 level as markets priced in an 85% probability of a 25 bps Fed rate cut at next week's December 9-10 FOMC meeting. The rally was fueled by weaker-than-expected U.S. employment data and renewed dollar weakness, offsetting price-induced demand softness in key Asian markets.

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📈 1️⃣ Recent Price Action

• Friday's Rally: Spot gold surged 1% to $4,212/oz, reclaiming the $4,200 threshold after dipping to $4,197 on Thursday
• Weekly Performance: Gold maintained consolidation within the $4,160–$4,255 range, holding above $4,200 for most of the week
• Year-to-Date Gains: Up approximately 60% YTD, with a 5.5% gain over the past month
• Technical Milestone: Sustained trading above $4,200 reinforces bullish sentiment ahead of Fed decision
• Session Pattern: Thursday saw mild Asian session weakness, but North American trading recovered losses on dovish Fed expectations

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💡 2️⃣ Key Drivers

🏦 a. Rate-Cut Expectations & Dollar Weakness

Markets now assign 85% probability to a 25 bps Fed cut on December 9-10, with odds climbing to 80% for January. ADP employment data showed a decline of 32,000 jobs in November, reinforcing rate-cut expectations. The weaker dollar has made gold more attractive to international buyers, with analysts noting the inverse correlation driving recent strength.

💰 b. Fiscal & Political Factors

Geopolitical uncertainties and safe-haven positioning continue supporting gold amid year-end portfolio rebalancing. Central banks remain structural buyers despite record price levels, signaling confidence in gold's role as a monetary asset.

📊 c. Technical Momentum

Gold is consolidating above key support at $4,160–$4,200, with immediate resistance at $4,245–$4,250. A breakout above $4,280 would target $4,300, then $4,340–$4,400. Critical support remains at $4,090–$4,100, with the 55-day moving average providing a safety net around $3,800.

🌍 d. Central Bank & Emerging Market Demand

Official sector purchases are projected to exceed 900 tonnes for 2025, marking the fourth consecutive year of heavy buying. Poland leads with 67 tonnes purchased, while China's official reserves reached approximately 2,300 tonnes by year-end. Despite a 20% H1 decline versus 2024, structural demand from emerging markets remains robust.

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🌏 3️⃣ Regional Highlights

• India: Physical demand remains subdued as dealers offer discounts up to $14/kg over domestic prices, with gold up over 50% year-over-year discouraging retail buyers post-festival season
• China: Market cooling due to new 6% VAT rules (effective November 1 through December 2027) and record prices dampening jewellery consumption; regulatory changes reducing short-term demand
• North America: Strong institutional interest as ETF flows stabilize and rate-cut optimism drives positioning ahead of Fed decision
• Emerging Markets: Central bank buying from Poland, Turkey, and India continues despite elevated prices, reflecting diversification and de-dollarization strategies

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🔭 4️⃣ Outlook

Near-term price action hinges on the December 9-10 FOMC meeting. A 25 bps cut as expected should support gold toward $4,300–$4,400 by year-end. Analysts forecast $4,200–$4,300 in December, with $5,000 remaining a realistic Q1 2026 target. J.P. Morgan and Goldman Sachs project $5,200–$5,300/oz by late 2026. Support at $4,090–$4,100 remains critical.

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💼 5️⃣ Investment Implications

Gold's 60% YTD gain reinforces its role as a portfolio diversifier and inflation hedge amid monetary easing. Despite softer Asian consumer demand, structural support from central banks and institutional flows provides a solid foundation. Investors should view pullbacks toward $4,100–$4,160 as accumulation opportunities, particularly ahead of anticipated 2026 rate cuts.

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⚠️ 6️⃣ Risks & Watchpoints

• Hawkish Fed Pivot: Any indication of fewer-than-expected 2026 cuts could trigger profit-taking and test $4,090 support
• Dollar Strength: Renewed USD strength from stronger-than-expected economic data could pressure gold below $4,200
• Asian Demand Weakness: Sustained discounts in India and China signal price resistance at current levels, limiting upside momentum
• Profit-Taking Risk: With 60% YTD gains, year-end portfolio rebalancing could drive near-term volatility

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💬 Closing Thoughts

Gold enters December positioned above critical support with the Fed decision as the immediate catalyst. While Asian consumer demand has cooled at record prices, structural central bank buying and rate-cut expectations provide a firm foundation. The next week will be pivotal—watch for Powell's guidance on 2026 policy trajectory and the updated dot plot.

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