Gold surged to an all-time peak above $2,450 per ounce as investors flocked to safe-haven assets, driven by mounting bets on U.S. Federal Reserve rate cuts and worsening global geopolitical risks. The rally lifted the XAU/USD benchmark and boosted ETF demand.
- Gold reached a record high above $2,450 per ounce on December 21, 2025.
- U.S. 10-year Treasury yield dropped to 3.82%, reflecting flight-to-quality demand.
- Fed rate-cut bets now exceed 120 basis points by mid-2026.
- SPDR Gold Trust (GLD) recorded $1.8 billion in inflows over the past week.
- USD/CAD declined 0.9%, EUR/USD rose 0.7% amid dollar weakness.
- Physical gold premiums in London and Shanghai increased by 2–3%.
Gold prices reached a new record high, breaching $2,450 per ounce in late trading on December 21, 2025, fueled by a sharp increase in expectations for imminent monetary easing by the U.S. Federal Reserve. Market participants now price in over 120 basis points of rate reductions by mid-2026, pushing the implied probability of a cut in January above 75%. This shift has weakened the U.S. dollar, with the USD/CAD dropping 0.9% and EUR/USD rising 0.7% as investors reposition portfolios toward non-yielding assets. The rally in gold has been amplified by persistent geopolitical stress, including renewed military escalation in Eastern Europe and heightened instability in the Middle East. These developments have strengthened the appeal of gold as a store of value during periods of uncertainty. The SPDR Gold Trust (GLD), the largest gold-backed ETF, saw inflows of $1.8 billion over the past week, signaling strong institutional demand. The yield on the U.S. 10-year Treasury note (US10Y) fell to 3.82%, its lowest level since June 2024, reflecting a flight to quality. The move in bond yields has compressed the opportunity cost of holding non-interest-bearing gold, further supporting its rally. Analysts note that gold's performance is now closely tied to the Fed’s forward guidance, with any deviation from dovish expectations likely to trigger volatility. Market participants are now closely monitoring upcoming economic data, including inflation reports and employment figures, which could influence the timing and pace of rate cuts. The rally has also prompted dealers to increase physical gold allocations, with spot premiums in major markets like London and Shanghai expanding by 2–3%.