Gold on pace for weekly win as ‘momentum’ drives historic 2025 rally-awdailynews

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2025-12-06

Gold on pace for weekly win as ‘momentum’ drives historic 2025 rally

Gold was on pace to eke out a weekly win on Friday as investor bets on a Federal Reserve rate cut next week continued to rise.

Gold futures hovered around $4,240, on track for a less than 1% increase this week and more than $100 off its October record high.

Investors overwhelmingly expect the Federal Reserve to cut the fed funds rate by 25 basis points next week. The expectation has put pressure on the US dollar index (DX-Y.NYB), lifting commodity prices invoiced in greenback currency.

Gold also tends to rise as interest rates fall and investors move away from interest-yielding assets like bonds.

The precious metal has surpassed more than 50 all-time highs this year, surging more than 60% year to date, making it a top asset for 2025, behind silver (SI=F), which is up roughly 100% year to date.

By comparison, the S&P 500 (^GSPC) has gained about 17% during the same period, while bitcoin (BTC-USD) is down roughly 2%.

According to a World Gold Council report, “momentum has played a larger role than in previous years, which is not surprising considering how gold’s strong rally has prompted widespread investor interest.”

“At the same time, central banks continued their buying spree — with demand well above average, even if below the records seen in the previous three years,” according to the study released on Thursday.

2025 year-to-date gold returns compared to other key asset classes. (Source: World Gold Council)

As gold heads toward its best annual return since 1979, continued fiscal spending and lower interest rates, along with a weaker dollar, should support higher prices in 2026.

“Our analysis shows that, in this environment, gold could rise 5%–15% in 2026 from current levels,“ the World Gold Council said. Given today’s prices, that would amount to as much as $4,900 per troy ounce.

“In addition, continued strategic central bank buying and potential new investment entrants, such as insurance companies in China or pension funds in India, could further support gold’s positive trend,” the report said.

On Thursday, Goldman Sachs analysts reiterated a “structurally bullish outlook for gold,” with a price target of $4,900 by the end of next year.