Gold Prices Hit Peak, But Profit-Taking Emerges
Gold prices experienced a slight decline on Wednesday after hitting a new high of around $4,526 early in the Asian session. Market volatility increased due to thin liquidity ahead of the Christmas holiday, triggering profit-taking at peak levels. At the time of writing, spot gold was trading around $4,464, registering a nearly 3% gain for the week.
Gold's rise so far this year has been striking, with prices surging more than 70% since the start of the year, putting it on track for its best annual performance since 1979. Strong demand for safe-haven assets has been a key driver, coupled with continued global geopolitical and economic uncertainty that has prompted investors to seek refuge. A broad-based weakening of the US dollar (USD) has also bolstered gold's rally, fueled by President Trump's protectionist trade policies and the Federal Reserve's monetary easing policies.
Under the Fed's policy, which has already cut interest rates by 75 basis points (bps) by 2025, and market expectations for further cuts next year, demand for gold remains subdued. Lower interest rates reduce the opportunity cost of holding non-yielding precious metals.
Even so, gold prices may experience temporary consolidation in the near term. The lack of new market catalysts and possible profit-taking towards the end of the year could put downward pressure on prices. However, the long-term uptrend remains solid, with many analysts predicting that this gold rally will continue into 2026.
Source: Newsmaker.id
