Gold Price Forecast

Gold prices are anticipated to rise due to positive global news, according to Praveen Singh, a Senior Analyst at Mirae Asset Sharekhan. He suggests that investors should consider a strategy of “buying on the edge.”

Gold Performance

• On December 8, spot gold traded within a narrow range between $4,176 and $4,219 as U.S. yields increased. At that point, gold was slightly down by 0.1% at $4,192, while February’s gold contract on MCX was down 0.36% at Rs 129,770.
• The week prior, gold closed nearly 0.95% lower, marking a weekly deficit at $4,198.

USD and Yield

• Currently, the U.S. dollar index is around 99.20, boosted by rising yields, which are up about 0.20% today.
• The 10-year bond yield is at 4.17%, up 0.90%, while the 2-year bond yield is at 3.59%, increasing by approximately 1%.
• U.S. Treasury yields have soared to a two-month high due to significant issuance and inflation worries as the Federal Reserve cuts rates amid rising inflation.
• The term premium has also climbed to 0.7%, roughly the same as in September.

Fed Watch

• There’s a 90% likelihood that the FOMC will reduce the federal funds rate by 25 basis points on December 10, and the market expects another cut by April.

ETFs and COMEX Stocks

• As of December 5, total global gold ETF holdings reached 97.84 million ounces, the highest since October 24, with an 18% year-to-date increase.
• COMEX gold inventory hit 18.277 million ounces, down 18.58% from its peak in April 2025.

China’s Gold Reserves

• The People’s Bank of China has continued its gold purchasing spree, acquiring 30,000 ounces for the 13th consecutive month.
• China’s foreign exchange reserves surged to almost $3.35 trillion, the highest since 2016.

BIS Insights

• The Bank for International Settlements notes that the retail investment surge in gold has turned it from a traditional safe-haven asset into a more speculative one. This has occurred alongside institutional investors hedging equity positions.
• Interestingly, both stocks and gold have been appreciating simultaneously, which is quite unusual.

Summary of Economic Data

• Japan’s GDP declined at an annualized rate of -2.3%, but this contraction is expected to be short-lived. Meanwhile, China’s trade surplus in November grew to $111.70 billion.
• At its December meeting, China’s Politburo emphasized boosting domestic demand as a primary goal for 2026.
• Recent U.S. data showed stagnant personal consumption, with little effect on the likelihood of a Fed rate cut.

Upcoming Data

• This week’s key U.S. reports include job openings, employment cost index, and trade balance. Internationally, China’s new renminbi loans and PPI/CPI data will be watched closely.
• Most notably, the Fed’s monetary policy announcement on December 10 is anticipated to signal a 25 basis point rate cut.

Gold Price Outlook

• The outlook for gold remains positive, buoyed by expectations of interest rate cuts, fiscal concerns, a weakening U.S. job market, and stagnant global trade flows influenced by tariffs and geopolitical tensions.
• If U.S. employment data indicates continued weakness, gold could potentially reach new record highs.
• It’s advisable to consider buying on dips.
• Current support levels are $4,160/$4,115/$4,085/$4,050, with resistance at $4,245/$4,300/$4,381 (previous highs).

Silver Price Outlook

• Silver ETFs have seen inflows of 132.50 million ounces this year, totaling approximately 4,121 tonnes. The holdings have increased by 18.50% year-to-date.
• The one-month LBMA swap rate stands at 6.41%, which, although lower than October’s peak of 34.95%, is still high compared to historical averages.
• We remain optimistic about silver since inventories in Chinese warehouses have dropped to nearly decade lows. Significant ETF inflows are also pushing prices up, despite rising U.S. yields.
• For the upcoming weeks and months, buying on dips is recommended, targeting $62 with stop losses set below $56.40/$54.