Spot gold was the first to break above the record high set in October, with gold futures following suit just a few hours later. There was no clear, single catalyst behind this move – but perhaps a clear catalyst is no longer necessary.

Seasonal factors are currently providing support, while year-end liquidity is rapidly drying up. The market’s focus has now shifted to whether the bulls can extend the rally into the final trading days of the year, or whether profit-taking will begin to cap the upside.

Since the October lows, gold has been locked in an uptrend, helped by seasonal support. As Christmas and year-end approach, trading volumes have been steadily declining. Unless a fresh catalyst emerges or year-end profit-taking accelerates, the prevailing uptrend faces very few obstacles.

Seasonality data over the past 50 years shows that in December, gold’s average and median returns are both around 1.1%. This suggests the overall pattern is fairly stable, although the probability of a positive December is only about 52%.

However, if we look only at the months when gold does rise, the average positive return is as high as 4.78%, while in the 48% of months that see declines, the average negative return is about -2.9%. Overall, the outlook remains constructive and any pullback is likely to attract strong dip-buying interest.

Gold has already gained more than 4.5% so far in December, and with only around a week of effective trading left in the year, the bulls may need to tread more carefully. That said, purely from a price-action perspective, there are still no clear signs of an imminent top. The Relative Strength Index has only just entered overbought territory – which is exactly where it tends to sit in a healthy, trending bull market.

The new long-term trading range for gold is expected to be between $4,200 and $5,100. For prices to break below the lower bound, the US labor market would need to remain resilient and further rate cuts would have to be taken off the table. However, the current expectation is that labor conditions will deteriorate and the Federal Reserve will cut rates by another 100 basis points even if inflation remains above its 2% target.

Market View:

On the 4-hour chart, gold continues to grind higher with MACD lines and histogram expanding above the zero line once again. Supported by a combination of favorable factors, the gold market is in a “coiled spring” phase. From the current steady advance, to the macro and geopolitical drivers behind it and on toward the potential new highs in 2026, investors should keep a close eye on Fed policy signals and global risk events.

Gold is not just a precious metal – it is also a barometer of the global economy.