Gold prices are on track to record a new record high weekly close, as prices test the resistance zone around $4,300/ounce. Overall, gold could increase by about 2.5% for the whole week.
Mr. Lukman Otunuga - Senior Market Analyst at FXTM - said that gold's upward momentum is still very solid, with the goal of moving towards higher price levels.
A clear breakout in this zone could pave the way for prices to $4,400 and beyond. Conversely, if weaken below $4,300, prices could sell off again to $4,240 and $4,200, he said. As the market is pricing in at least two Fed rate cuts next year, buyers have foundation to expect. A widely weakening USD and central bank demand could continue to support deep gold's rally into 2026".
Although gold is attracting new buying momentum, analysts also warn that entering the holiday season could increase volatility. thin liquidity in the last full trading week of 2025 could distort technical signals and lead to strong price fluctuations.
Mr. Aaron Hill - Director of Market Analysis at FP Markets - said he expects gold to trade in a wide range of 4,250 - 4,380 USD/ounce.
Smooth liquidity will make the market bustle - just need a quiet night, you can wake up and see that the price has shifted by $60 compared to when you go to bed - but the general trend is still going up.
I will monitor the $4,255 mark as a key boundary. If it breaks through this level, prices could quickly slide to $4,200 in a low-volume environment. But as long as that mark remains, I still consider each correction as an opportunity," he said.
In addition to the possibility of fluctuations, the US Department of Labor will release October and November employment data next week, along with November inflation data.
According to consensus forecasts, economists believe that the US economy only created about 50,000 more jobs last month, showing that the labor market continued to cool down. Meanwhile, the Consumer Price Index (CPI) is forecast to increase back above 3%.
Commodity analysts believe that the current data context is still beneficial for gold, as weak economic activity increases the pressure for the Fed to soon start the interest rate cut cycle.
Outside North America, the Bank of England (BoE) and the European Central Bank (ECB) will both hold their final monetary policy meetings of the year. The BoE is expected to likely continue to ease interest rates, while the market expects the ECB to maintain its policy.
With the ECB's policy likely to support the euro until the end of the year, analysts said they will closely monitor further weakening of the USD, a factor that could provide a final "push" for gold before the end of 2025.
Economic data to watch next week
Monday: Empire State Production Index (USA).
Tuesday: US non-farm payroll; US retail sales; Quick PMI survey.
Thursday: BoE and ECB monetary policy meeting; US weekly jobless claims; US CPI; Philly Fed manufacturing index.
Friday: US existing housing sales.
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