Technical indicators support a decline in gold prices after exceeding $4,500
Gold saw little change on Thursday after a three-day rally that took the precious metal to a record high above $4,500 an ounce. Platinum, meanwhile, fell more than 6%, also retreating from its overnight record high.Some traders have begun taking profits as the year draws to a close, following a strong rally in precious metals markets, which is still keeping gold up by nearly 70% by 2025. Platinum has more than doubled in price.
Technical indicators supported the selling pressure. Gold's 14-day relative strength index was in overbought territory on Wednesday, suggesting a possible pause or decline in the price.
What drove gold prices during 2025
Gold prices recorded a new all-time high today, rising by more than 3% since the beginning of the current week and approaching the $4,500/oz threshold. Gold is also on track to close out 2025 with gains of around 70% since the start of the year.
Investors particularly ETF funds have rushed into gold buying (despite gold paying no interests) for several key reasons, most notably the tariffs imposed by the new Trump administration on U.S. trading partners, as well as escalating global geopolitical tensions. The latest example occurred yesterday, when the United States prevented sanctioned oil tankers from leaving Venezuela and deployed naval forces near Venezuelan territorial waters, a move widely viewed as tantamount to a declaration of war.
Additional support for gold prices has come from concerns over President Trump’s direct attempts to exert greater control over U.S. monetary policy, raising questions about the Federal Reserve’s independence following his decision to remove Lisa Cook from the Federal Reserve Board of Governors, alongside the continued rise in already elevated U.S. public debt.
On the other hand, gold has also benefited from increased demand by central banks, particularly after the United States and its allies froze the Russian central bank’s assets following the Russia–Ukraine war. This move prompted several countries (led by China) to take concrete steps toward reducing their foreign currency reserves and replacing them with gold.
What is the expected trend for gold prices in 2026, and what are the key drivers?
In the coming year, gold prices may continue to rise as government bonds lose some of their appeal amid declining interest rates. Markets increasingly expect the Federal Reserve to deliver three interest rate cuts in 2026, each of 25 basis points, reflecting a growing conviction that monetary easing will continue. One of the main factors supporting this expectation is that a new Federal Reserve Chair will be appointed next year to replace Jerome Powell, whose term ends in May. It is widely expected that President Trump will appoint a more accommodative figure who is open to further rate cuts.
Among the key factors that could halt gold’s rally are a strengthening U.S. dollar, an end to U.S. trade war tensions, and easing geopolitical risks, such as reaching an agreement to end the Russia–Ukraine war.
Gold: Technical Analysis
Gold prices have recorded new record highs since the beginning of this week, with prices breaking above the $4,400 per ounce level yesterday and moving toward a test of the high end of the current trading zone located between $4,250 and $4,500. A daily close above $4,500 would signal strong bullish momentum and could drive prices higher toward the $4,700 level. In this case, the psychological support level at $4,600 should be closely monitored.
Key levels to watch in the alternative scenario
Failure to achieve a daily close above $4,500 would signal profit-taking activity and a weakening of bullish momentum, potentially pushing prices back toward the low end of the trading zone mentioned above. A daily close below $4,250 would indicate the possible start of a corrective move within the broader uptrend, potentially driving prices toward the $3,900 level. In this scenario, the following support levels should be closely monitored: the 50-day simple moving average combined with the ascending trendline originating from the October 28 low, as well as the psychological support level at $4,000.
It is worth noting that the Relative Strength Index is currently trading above the 70 level, and any decline below this threshold would signal weakening bullish momentum and indicate the potential for a price pullback.
