Insights 
VT 
Key Points
- Spot gold rose 0.7% to $4,363.79 after falling to its lowest level since December 17.
- Gold is up 66% in 2025, while silver has surged 154% year to date.
Gold prices rose on Tuesday as the market stabilised following a bout of year-end profit-taking that dragged precious metals lower in the previous session.
Spot gold traded 0.7% higher at $4,363.79 per ounce as of 0322 GMT, rebounding after Monday’s drop to its lowest level since December 17. That decline marked gold’s sharpest daily loss since October 21.
The recovery came after prices pulled back from a record high of $4,549.71 reached on Friday.
US gold futures for February delivery also firmed, rising 0.8% to $4,377.80 per ounce, signalling that dip-buying interest has returned despite elevated volatility.
Overextended Rally Triggered Position Unwind
Analysts attributed the sell-off to stretched positioning rather than a shift in the broader trend.
Our research desk noted that the rally had become overextended over the past week, leaving leveraged long positions vulnerable to being squeezed.
Momentum indicators reflected this adjustment. Relative strength indices for both gold and silver dropped out of overbought territory on Monday, easing some of the technical excess built up during the rapid ascent earlier in the month.
Structural Drivers Remain in Place
Despite the pullback, gold’s broader performance in 2025 remains strong.
Bullion has climbed 66% so far this year, supported by expectations of interest rate cuts, ongoing global conflict, steady central bank buying, and rising holdings in exchange-traded funds.
Markets continue to expect at least two interest rate cuts by the US Federal Reserve next year.
In a lower-rate environment, non-yielding assets such as gold tend to attract sustained demand, reinforcing the medium-term support base even after sharp corrections.
Technical Analysis
Gold continues to climb, reaching fresh multi-month highs near $4,364, with price action maintaining a strong bullish structure above all key moving averages.
The uptrend began accelerating in early September and hasn’t lost steam, supported by consistently higher lows and rising momentum.
The 5/10/30 MA alignment remains firmly positive, reflecting sustained bullish sentiment.
The MACD shows healthy separation above the signal line, although the recent pause in histogram growth may suggest temporary consolidation ahead.
Traders should watch the $4,400–4,450 zone for potential profit-taking or a short-term pullback. A decisive break above this level could open room toward the $4,600 psychological mark.
Cautious Outlook as Volatility Persists
Gold may continue to stabilise above the $4,300 level as speculative excess unwinds and longer-term buyers re-enter.
However, sharp swings may persist as markets adjust to crowded positioning and thin year-end liquidity.
As long as rate cut expectations and global risks remain in play, pullbacks may stay corrective rather than trend-breaking in the near term.
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