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Fed’s Third Rate Cut of the Year Lifts Gold Above 4,230 USD: Silver Outperforms as Central Banks and ETFs Underpin a Structural Bull Market

2025-12-11 10:05:10 | 浏览 444

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After the Federal Reserve delivered its third 25-basis-point rate cut this year, lowering the federal funds target range to 3.50%3.75%, global markets reacted swiftly: the Dow Jones surged by nearly 600 points, the US dollar index slumped, and both gold and silver jumped sharply. COMEX gold futures briefly broke above 4,260 USD per ounce, while spot gold climbed over 4,230 USD, bringing its year-to-date gains to around 60% and cementing its position as one of 2025s top-performing major assets.


What stands out in this leg of the rally is silver’s outperformance. COMEX silver futures have risen above 62 USD per ounce, with year-to-date gains close to twice those of gold, driving the gold-to-silver ratio below 70 for the first time since July 2021. Supported by demand from renewable energy, solar and advanced manufacturing, silvers dual identity as both an industrial and a precious metal is attracting investors looking to leverage its higher beta.


Despite the strong price action, allocation behaviour among ETFs and official sector buyers remains relatively disciplined. On the ETF side, as of 9 December, SPDR Gold Trust holdings stood at 1,047.97 tons, down 1.14 tons from the previous session, suggesting that some short-term players are taking profits ahead of key events. In contrast, data from the World Gold Council and other institutions show that global gold ETF holdings have risen for six consecutive months, with total net inflows in 2025 exceeding 700 tons and putting this year on track for the largest annual increase on record, driven in large part by Asian investors.


Central bank buying continues to provide a solid medium-to-long-term floor for gold. By the end of OctoberNovember, the Peoples Bank of China had increased its gold reserves for 1213 straight months to roughly 74.1 million ounces, while global central banks added a net 220 tons in the third quarter, up 28% from Q2despite spot prices repeatedly hitting record highs. Against a backdrop of de-dollarisation, heightened geopolitical risk and soaring global debt, golds strategic role in sovereign reserves and institutional portfolios is being further reinforced.


Looking ahead, many major banks and research houses expect gold to remain one of the few commodities capable of outperforming into 2026. Goldman Sachs, for example, has set a year-end 2026 gold price target of 4,900 USD per ounce and noted that this forecast still has room to be revised higher. With the Fed shifting into a gentler easing path, real yields trending lower, and sustained demand from both central banks and ETFs, the current consolidation at elevated levels appears more like a mid-cycle pause in an ongoing bull market” than the end of the story.

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