29-12-2025

                                                                                                   GOLD

WEEKLY REPORT

Gold continued its strong upward momentum this week, drawing global attention after prices surged to fresh record highs. The rally reflects a broader shift in investor sentiment toward safe-haven assets amid rising geopolitical tensions, persistent global uncertainty, and growing expectations of a change in U.S. monetary policy. Support from central bank buying, a weakening outlook for the U.S. dollar, and low investor allocation to gold have further strengthened the metal’s appeal. Against this backdrop, gold remains a key asset for risk management, with market participants closely monitoring economic data and geopolitical developments for direction in the weeks ahead.

Gold Prices Hit Fresh Record Highs

Gold prices recorded a historic move this week, reaching a new all-time high of $4,550 per ounce in the international market. The rally was supported by a combination of global uncertainty, escalating geopolitical tensions, and increasing expectations that the U.S. Federal Reserve may begin an interest rate cutting cycle in the coming year. After touching record levels, prices witnessed mild profit booking and settled around $4,470 per ounce. However, the limited correction indicates that underlying buying interest remains strong and the broader trend continues to favor gold.

Geopolitical Developments Keep Safe-Haven Demand Strong

Global geopolitical risks remain a key driver of gold prices. The United States recently carried out airstrikes against ISIS targets in northwest Nigeria, highlighting ongoing security concerns. At the same time, the Russia–Ukraine conflict continues, even though recent statements from U.S. and Ukrainian leadership suggest that negotiations toward a possible peace agreement are nearing completion. Despite this optimism, several sensitive issues remain unresolved, keeping market uncertainty elevated.

In addition, tensions between the United States and Venezuela have increased, particularly related to energy and crude oil shipments. Instability in the Middle East continues to add to investor caution. In the Asia-Pacific region, China’s large-scale military exercises around Taiwan have raised concerns

about regional stability, with Taiwan reiterating its commitment to defend its democratic system. Although hopes of progress in peace talks have occasionally pressured gold prices from higher levels, investors believe that geopolitical risks will persist until clear and final agreements are achieved, sustaining demand for safe-haven assets like gold.

29-12-2025

Central Bank Demand Provides Strong Structural Support

From a long-term perspective, gold continues to benefit from strong and consistent demand from central banks. According to research by Goldman Sachs, the share of gold in foreign exchange reserves held by emerging market central banks, including China, remains significantly lower than that of developed economies such as the United States. This imbalance suggests substantial scope for increased gold purchases as part of long-term reserve diversification strategies.

Goldman Sachs estimates that in 2026, central banks could purchase an average of 70 tonnes of gold per month, which is close to the recent 12-month average of around 66 tonnes and nearly four times the monthly average recorded between 2019 and 2021. Surveys of central banks also indicate that gold demand is currently at record levels, reinforcing the view that official sector buying will remain a key pillar supporting gold prices in the years ahead.

U.S. Dollar Outlook and Monetary Policy Expectations

While the U.S. economy continues to show resilience, supported by AI-driven and technology-led growth, this strength may not be sufficient to maintain a strong U.S. dollar over the medium to long term. Market expectations are increasingly centered on the possibility that the Federal Reserve may cut interest rates by up to 0.50% next year. Lower interest rates generally reduce the appeal of the dollar and improve the relative attractiveness of non-yielding assets such as gold.

In addition, ongoing global economic uncertainties and rising fiscal pressures could continue to weigh on the dollar. A softer dollar environment would provide further support to gold prices, particularly as investors seek protection against currency volatility and declining real yields.

29-12-2025

ETF Positioning and Investor Allocation

Investor positioning in gold remains relatively low, especially in exchange-traded funds. U.S. private financial portfolios currently allocate only around 0.17% to Gold ETFs, indicating that gold is still under-owned. Even a small increase in allocation levels could lead to significant inflows into gold, potentially driving prices higher.

Recent ETF data reflects improving sentiment, with Gold Trust holdings increasing by approximately 3 tonnes to 1,071.13 tonnes. Meanwhile, Silver Trust holdings have remained largely stable, suggesting a cautious but steady approach from investors. While some profit booking in ETFs cannot

be ruled out following the sharp rally, the broader trend continues to reflect long-term accumulation rather than distribution.

CFTC Gold Speculative Positioning

The CFTC Gold Speculative Positions data, released in the weekly Commitments of Traders (COT) report, reflects how large non-commercial traders such as hedge funds are positioned in the gold futures market. A rise in net speculative long positions indicates that these participants are increasing bullish bets on gold, signaling stronger market confidence in further price upside. This improvement in speculative sentiment typically supports gold prices, especially when combined with ongoing geopolitical risks, expectations of U.S. interest rate cuts, and a softer outlook for the U.S. dollar. However, if positioning becomes excessively crowded, it can also lead to short-term volatility due to profit booking. Overall, current speculative positioning suggests that sentiment toward gold remains positive and supportive of the prevailing uptrend.

Market Outlook and Conclusion

Overall, gold remains well supported by a combination of persistent geopolitical risks, strong central bank buying, expectations of easier U.S. monetary policy, and low investor allocation. While short-term volatility and periodic profit booking are natural after such a sharp move, the structural factors driving gold prices remain firmly in place. As a result, the medium- to long-term outlook for gold continues to remain constructive, with gold likely to stay an important hedge against global uncertainty in the period ahead.

29-12-2025

TECHNICAL ANALYSIS

From a technical perspective, gold continues to trade in a strong bullish structure. In the international market, $4,350–$4,370 is acting as an important support zone. As long as prices hold above this range, the upside momentum is expected to remain intact. Traders can consider buying on dips near this support area with a stop loss below $4,250 to manage risk. On the upside, a move toward the $4,500 level remains a key target, especially if prices sustain above recent consolidation levels.

In the MCX Gold market, the trend also remains positive. The recommended buying zone is ₹1,34,000–₹1,33,500, where demand is expected to emerge on minor pullbacks. A stop loss below ₹1,29,000 should be strictly maintained to protect against unexpected volatility. If prices hold above the support zone, MCX Gold can move higher toward the ₹1,38,500 target in the near term. Overall, the technical setup favors a buy-on-dips strategy while maintaining disciplined risk management.

29-12-2025

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