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Week 51 Gold Market Recap: Feds Hawkish Cut Fuels Epic Year-End Rally

2025-12-22 09:10:14 | 浏览 173

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Spot gold extended its strong momentum this week, peaking at $4,258 per ounce and closing the week in the $4,242-$4,250 range, marking a 2.5% weekly gain and successfully breaking through the critical $4,250 resistance level; XAGUSD silver concurrently hit a yearly high of $63.25 per ounce, up over 2%, supported by the same macroeconomic tailwinds. The gold price rally was driven by the Federal Reserves rate cut, weak nonfarm payrolls (adding 198,000 jobs), and robust global/ETF fund inflows, with spot gold rebounding from $4,200 support and surging 1.8% in a single day following the FOMC meeting, weighed down by ADP revised data and ISM services PMI at 51.2. Shanghai gold benchmark averaged RMB 540 per gram (premium steady at RMB 20), COMEX December futures settled at $4,248.30 per ounce (YTD gain nearly 62%), while silvers breakout reflects parallel safe-haven fund flows.

Federal Reserve Policy Impact

The Federal Reserve implemented a 25 basis point rate cut on December 10, lowering the federal funds target range to 3.50%-3.75%—its third consecutive cut and the lowest since 2022—with FOMC voting divisions highlighting a "hawkish cut" tone despite actual easing. Chair Powell emphasised a cooling labor market, with slowing job gains, rising unemployment, and JOLTs vacancies dropping to 8.1 million, alongside inflation approaching the 2% target, supporting avoidance of policy over-tightening while reiterating data-dependent decisions. This "hawkish cut" bolsters gold prices by compressing real yields, though 2026 dot plot guidance turns cautious, with institutions raising year-end gold targets to $4,400-$4,500.

Macroeconomic Drivers

November PPI rose 0.1% MoM for two consecutive months, signaling industrial price stabilisation, while YoY fell 2.2% reflecting domestic demand recovery pressures; Chinas November trade data showed 5.4% YoY export growth demonstrating resilience, with annual central bank gold purchases totaling 1,320 tonnes (China +28 tonnes, India +22 tonnes in November). SPDR Gold ETF recorded $387 million net inflows last week (equivalent to approximately 12 tonnes), hitting a recent high, complemented by iShares Gold Trust reflows, as prolonged Middle East conflicts and Trump tariff policy expectations elevated safe-haven premiums; the US Dollar Index (DXY) fell sharply to near 98, strongly favoring gold prices, while the major indices weakened collectively this week (Dow -0.3%, S&P 500 -0.5%, Nasdaq -0.8%), eroding risk appetite and accelerating fund flows back to non-yielding assets, with Shanghai Gold Exchange Au9999 volume up 18% WoW and strong institutional buying on dips.

Year-End Key Data Analysis

Gold maintains robust bullish momentum, with institutions targeting $4,400-$4,500 by year-end; continued DXY weakness and US equity pressure would unlock further upside potential. From December 19, a data cluster will test bullish resolve: US retail sales (expected +0.3% MoM) to gauge consumption resilience, China CPI (December 20, expected +0.5% YoY) to reveal deflation inflection, and ECB December meeting (December 21, expected to hold at 3.25% but signal 2026 easing), where any downside surprises would favor gold breaking yearly highs.

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