🟡 Gold jumps 1.8% on Fed and geopolitics

Gold and silver are opening the holiday-shortened week with strong bullish gains (GOLD: +1.8% to around USD 4,420, SILVER: +2.5% to around USD 68.20), pushing key precious metals to new all-time highs. Demand for safe havens is being driven primarily by market positioning around US monetary policy in 2026, as well as rising tensions between Venezuela and the United States.

The GOLD contract has broken through a key resistance level at the October high near USD 4,375 per ounce, following the trajectory of the current upward channel. Holding above this level will be crucial to sustain the upward move; otherwise, a correction may occur—especially if geopolitical uncertainty, which has boosted trading volumes in key precious metals in recent weeks, begins to fade. RSI has once again entered overbought territory, although this year gold has shown little difficulty trading above this level. Source: xStation5

The latest breakout in precious metals is primarily driven by increasingly dovish expectations toward the Fed in 2026. The market approached the most recent FOMC meeting with considerable caution, as the decision was made without key inflation or labor market data; however, Powell’s calm stance and the absence of a so-called “hawkish cut” injected optimism into markets. Expectations for a January rate cut have eased somewhat over the past month (currently around a 20% probability of another cut, source: CME FedWatch), but the market is once again pricing in more than two rate cuts before the end of 2026, supported further by the latest CPI inflation reading, which came in well below expectations. The issue of appointing a new Fed chair is playing a diminishing role, as even a Trump-nominated candidate would face the difficult task of persuading the rest of the FOMC to adopt a more dovish stance. Nevertheless, as already lower interest rates reduce the opportunity cost of holding gold relative to other interest-bearing assets—especially government bonds—expectations toward the Fed continue to translate into rising, already elevated demand.

Market is currently betting on no cut in January, though swaps price in more than 2 cuts before Semptember. Source: CME FedWatch.

Precious metals are coming off a record year—gold alone has surged by as much as 70%. Metals that previously remained outside the market’s spotlight are now trying to catch up. Platinum and silver are also rising, not only gaining popularity as stores of value but also attracting attention for their role in rapidly growing industrial sectors.

There is also no shortage of new geopolitical factors reducing risk appetite and encouraging flows into safe havens. Over the weekend, the US seized yet another oil tanker off the coast of Venezuela, and investors are clearly concerned about the possibility of another armed conflict emerging on the global map.

Demand may continue to find support from central banks, which are not only cutting interest rates but also increasing their gold reserves—especially in emerging market countries. Retail investors are following suit, seeking rapid exposure to the market through both physical bullion and ETFs.

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🟡 Gold jumps 1.8% on Fed and geopolitics

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