Gold consolidates as markets brace for Fed guidance

10 December 2025

Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A

Gold retreated slightly but held in a consolidation band near USD 4,200 on Wednesday. Investors could remain cautious and avoid major moves ahead of the Federal Reserve’s policy announcement later today.

While a 25-basis-point cut is fully priced in, the tone of Chair Jerome Powell and the projections for 2026 could be pivotal and could affect investors’ expectations. A hawkish signal could pressure the metal, whereas a more dovish guidance would likely revive this year’s bullish trend. The market could also react to the Fed’s interest rate forecast and could record increased volatility as a result.

Besides the monetary policy impact, gold could remain well supported over the medium to long term by a risk-sensitive global backdrop. Tensions in the Middle East and Eastern Europe remain elevated and could continue to support demand for safe-haven assets. While efforts for peace in Eastern Europe continue, the lack of tangible results could leave gold with strong support. Additionally, investors could continue to gauge the developments in Asia as the confrontation between China and Japan raises some concerns.

At the same time, central banks continue to accumulate gold reserves, which could put a floor under prices if monetary policy moves in an adverse direction. Gold ETF inflows have also stabilized in the positive territory lately after a small period of outflows in October, which could continue to reinforce the medium-term bullish narrative.

 

Zaid Barem / ymm