Gold prices are likely to fluctuate according to the developments of oil prices in the short term, as geopolitical factors continue to dominate the market in the early days of 2026. Although a correction may appear in January due to rebalancing of commodity indices, the main trend of gold is still assessed to be upwards, according to the World Gold Council (WGC).
In the latest Weekly Markets Monitor report, WGC experts said gold prices adjusted in the last week of 2025, when LBMA gold prices in the afternoon session fell 2% compared to the previous week. However, for the whole year 2025, gold still increased by 67% - the strongest increase since 1979.
WGC believes that this decrease is likely related to year-end portfolio restructuring after the strong increase in gold in 2025, along with short-term profit-taking by investors causing the upward momentum to temporarily cool down. In the most recent week, capital inflows into global gold ETF funds slowed as gold prices retreated, while the net buying position on the Shanghai Futures Exchange also declined.
According to the WGC, gold prices have reversed from the historical peak, weekly movements have shifted to weakness, showing the possibility of a new accumulation phase. However, experts emphasize that the core trend of gold is still upwards.
Military developments related to Venezuela last weekend continued to show that geopolitical instability will be an important driving force driving safe haven demand in 2026, similar to 2025. However, the WGC noted that the medium-term impact of this factor is still not completely clear, in the context of the US increasing efforts to strengthen the role of the USD in the global energy trading system.
Oil prices are the focus of market attention, but many opinions suggest that a strong increase in production will take years and cost billions of USD. Meanwhile, the position in the Brent and WTI oil futures markets is currently in a large short selling position. The dien bien of oil prices and the USD may play a key role in gold price fluctuations this week," WGC said.
Besides geopolitical factors, WGC believes that investors need to closely monitor developments at the U.S. Federal Reserve in 2026, both in terms of interest rate policy and personnel factors. Although economic data such as the US jobs report or PMI may affect interest rate cut expectations, the selection of a new Chairman of the US Federal Reserve (Fed) – currently not yet announced by President Donald Trump – may have a stronger impact on market sentiment.
After the strongest year of increase in 46 years, the rebalancing of major commodity indices is also a noteworthy factor. According to WGC, these indices will have to sell some gold based on the price at the end of 2025 and the target proportion for 2026, thereby potentially creating certain fluctuations in the short term.
Technically, WGC said that the strong upward momentum of both gold and silver reversed quite suddenly at the end of December. Forecast indicators show signs of weakening, implying that the market may have formed a temporary "exhaust peak" and entered a period of accumulation. However, if it appears, this accumulation period is seen as just a temporary break in the long-term upward trend.
According to WGC analysis, the important resistance zone of gold is currently above the 4,700 USD/ounce mark, while the nearest support zone is determined around 4,297 USD/ounce. If it breaks this threshold, gold prices may retreat to a stronger support zone around 4,185 USD/ounce. In the opposite direction, re-entering the 4,474 USD/ounce mark may pave the way for prices to test the peak area at the end of 2025 around 4,550 USD/ounce again.
In the latest trading session, spot gold prices continued to fluctuate close to the peak of the day after the US announced the ISM Manufacturing index in December lower than expected. At the most recent time, spot gold prices stood at 4,445.10 USD/ounce, up 2.61% compared to the previous session.
