Gold faces correction as conflicting drivers cloud outlook

Gold blasted through to a new all-time high on December 22, 2025, clearing $4,400 per ounce in early trading. The surge rode a wave of speculation that the US Federal Reserve (Fed) would keep cutting interest rates following the latest inflation cooling in the country.

However, this burst of momentum may be short-lived. A chorus of Fed officials, including Cleveland's Beth Hammack, is now calling for a breather to gauge the impact of reductions already delivered—throwing a potential wrench into the rally's gears. Geopolitical tensions, ranging from pressure on Venezuela to instability in Eastern Europe, continue to prop up safe-haven demand, though this trend is starting to lose the shine due to its protracted nature.

Beneath the speculative frenzy backed by monetary easing efforts, a fundamental crack is forming: real-world demand is wilting under record prices. Therefore, physical purchasing in key consumer markets is drying up. Swiss gold exports to India tell the tale—they collapsed to 2 tons in November, down from 26 tons a month earlier, a classic sign that retail buyers are being factored out by heavy figures. When gold rallies this far ahead of physical appetite amid high liquidity, it often spells trouble.

Technically, bullion is in a powerful uptrend that picked up steam today after a brief pause. Meanwhile, the Chaikin Oscillator's positive, rising reading confirms strong bullish momentum and fresh capital inflows. Nevertheless, if the indicator's pace lags behind the price action, it could signal market fatigue and foreshadow a correction.

In short, the metal surged on a speculative basis while demand fades in the rearview mirror. With technicals hinting at exhaustion, the stage is set for a reality check in the form of a pullback.

The plan down below may prove instrumental for your trading:

Sell gold on the current rise near $4,400. Take profit: $4,280. Stop loss: $4,480.

This forecast holds true from December 22 till December 31, 2025.