Gold prices declined during Thursday’s Asian session due to profit-taking and a stronger US Dollar. Despite this, geopolitical risks and Fed rate cut bets might limit further losses. The yellow metal fell as it retreated from seven-week highs amid the dollar’s rebound.<\/p>\n
The recent US jobs data supported expectations for further interest rate cuts, potentially reducing the opportunity cost of holding gold. Geopolitical tensions have risen as Venezuela deployed its navy to escort oil ships, which could buoy gold as a safe-haven asset.<\/p>\n
Traders are anticipating the release of the US Consumer Price Index (CPI) inflation data forecasting a 3.1% YoY rise for the headline CPI in November, and a 3.0% YoY increase for core CPI. The US weekly Initial Jobless Claims will also release later in the day. <\/p>\n
Gold holds a positive technical bias, showing a favourable outlook in the long term. Prices remain above the key 100-day Exponential Moving Average, and the Bollinger Bands widen, suggesting further potential upsides. If green candlesticks build above the upper Bollinger Band boundary, Gold could reach towards the $4,400 mark, while red candles below $4,300 might attract sellers.<\/p>\n
As of today, December 18, 2025, we are seeing gold pull back from recent highs near $2,450 an ounce due to some profit-taking. This slight weakness is also supported by a temporary rebound in the US Dollar. However, the bigger picture for gold remains constructive as we head into the final weeks of the year.<\/p>\n
The market’s primary focus is on future Federal Reserve actions, much like the pivot we anticipated back in late 2023. Currently, the CME FedWatch Tool shows markets are pricing in over a 70% chance of a first rate cut by March 2026. This expectation of lower interest rates is putting a floor under gold prices, as it reduces the opportunity cost of holding the non-yielding metal.<\/p>\n
All eyes are now on the upcoming US Consumer Price Index (CPI) report, which will be a major catalyst. We remember how the November 2023 CPI reading came in at 3.1%, showing a slow and stubborn path down for inflation. A similar sticky number now could cause a sharp, short-term drop in gold as the market might push back its rate cut timeline.<\/p>\n
Geopolitical risk continues to provide a strong underlying bid for gold, acting as a safe-haven asset. Persistent tensions in the Middle East, reminiscent of the Red Sea shipping disruptions that began in late 2023, ensure that any significant dip in price is likely to be bought. This ongoing uncertainty makes holding short positions in gold a risky proposition.<\/p>\n
For derivative traders, this environment suggests playing the expected volatility around the upcoming inflation data. Buying a straddle or strangle option strategy could be effective, profiting from a large price move in either direction without having to predict the outcome of the CPI report. Implied volatility on gold options is elevated, reflecting the market’s anticipation of a sharp move.<\/p>\n
Those with a directional bias could use options to define their risk. If we expect a soft inflation number to confirm the Fed’s path to rate cuts, buying call options or call spreads offers a leveraged bet on gold breaking its recent highs. Conversely, if we fear inflation remains hot, buying puts provides a hedge or a way to speculate on a pullback toward the 100-day moving average around $2,350.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Gold dips on profit-taking, but Fed rate cut hopes and geopolitics support long-term bullish outlook.<\/p>\n","protected":false},"author":62,"featured_media":16974,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-37165","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37165","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=37165"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/37165\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16974"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=37165"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=37165"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=37165"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}