Gold extends rally, geopolitical risks intensify

23 Aralık 2025

Market comments on behalf of Li Xing Financial Markets Strategist Consultant to Exness

Gold extended its rally on Tuesday, as escalating geopolitical tensions and a softer dollar reinforced demand for safe-haven assets. Geopolitical risks have intensified across multiple fronts. Tensions between the United States and Venezuela escalated further, following two tanker seizures this month. In Asia, frictions between China and Japan remain elevated. Meanwhile, risks in Eastern Europe continue to rise, eroding hopes for a near-term ceasefire, while instability in the Middle East persists.

Beyond geopolitics, gold continues to benefit from a weaker dollar as expectations of US monetary easing weigh on the currency and treasury yields. Markets currently expect the Federal Reserve to keep rates unchanged in January, but still price in two cuts by the end of 2026. Today’s US GDP data could be pivotal in shaping those expectations, with signs of economic softening likely to further pressure the dollar and support gold.

At the same time, gold-backed ETFs recorded another week of inflows in the week ending December 19, adding a net 3.1 tonnes, which could support gold if the trend continues. However, US-listed funds led with inflows of 9 tonnes, while Europe saw outflows of 6.4 tonnes, which could fuel some caution.

 

Zaid Barem / ymm