Gold holds near record highs

17 December 2025

Gold Holds Near Record Highs as Monetary Policy Expectations and Geopolitical Risks Support Demand

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

Gold traded close to all-time highs on Wednesday, supported by a combination of expectations of accommodative monetary policy, persistent geopolitical risks and strong investor demand.

Monetary policy remains an important driver. While US employment data was mixed, markets continue to see the Federal Reserve cutting its interest rates two times during the first part of 2026, which could continue to support gold over that period.

Investors are now focused on November’s CPI data due on Thursday, followed by PCE figures on Friday. Both headline and core inflation are expected to remain around 3%. Any evidence of disinflation would likely drag yields lower, weigh on the dollar and open the door for gold to challenge new record highs.

Internationally, monetary policy divergence could create some uncertainty. While the Bank of England is widely expected to cut rates by 25 basis points on Thursday, reinforcing the appeal of non-yielding assets, the Bank of Japan is expected to raise rates, a move that could cap gold’s gains to some extent.

ETF demand continues to underpin prices. Elevated interest from investors and ongoing central bank purchases remain an important medium-term support.

Geopolitical tensions add another layer of support. Risk sentiment deteriorated after President Donald Trump ordered a “total and complete” blockade of sanctioned Venezuelan oil tankers, following last week’s seizure and a US military buildup in the region. In parallel, tensions in Eastern Europe and the Middle East persist. In Asia, frictions between China and Japan continue, sustaining demand for safe-haven assets.

 

Zaid Barem / ymm