Gold prices slip
Gold prices moved lower in the last trading sessions of the year as investors chose to lock in gains. It had reached record levels just days earlier, but the holiday season made trading slow. Spot gold, which had touched a record high of nearly $4,550 on Friday, fell about 1.9% to around $4,448 per ounce. US gold futures for February delivery also dropped by about 2% to around $4,468 per ounce. Market analysts said the fall was not due to weak demand but reflected normal selling after a strong rise in prices.
Profit booking drives year-end decline
Experts said profit booking was the main reason behind the fall in gold prices. After a sharp rally this year, many traders preferred to close positions before the year-end. Ricardo Evangelista, analyst at ActivTrades, said the price drop followed record highs and was mainly due to traders taking profits. There was no major change in supply or long-term demand for gold. Thin trading volumes during the holiday period also added to price swings. With fewer participants in the market, even small trades can lead to sharp moves.
Geopolitical changes
Gold also faced pressure as concerns over global conflicts eased slightly. US President Donald Trump said he was close to an agreement with Ukrainian President Volodymyr Zelenskiy to end the war in Ukraine. Such comments reduced short-term demand for gold as a safe-haven asset. When geopolitical risks appear to fall, investors often move money away from gold and into riskier assets. However, analysts said global uncertainty remains high and could continue to support gold prices in the longer term.
Wait for Fed
Investors are now focused on the US Federal Reserve for signals on interest rates. Markets are waiting for the minutes of the Fed’s December meeting, which are due this week. Traders are currently expecting two interest rate cuts next year. Gold usually benefits from lower interest rates because it does not pay interest. Lower rates also weaken the US dollar, making gold cheaper for overseas buyers.
Strong gains
Even after the recent decline, gold has posted strong gains this year. Prices are up about 72% so far. The rise was driven by hopes of lower US rates, a weak dollar, global tensions, and heavy buying by central banks. Some analysts warned that gold prices are high and could fall if the Fed takes a tougher stance or if investors pull money out of gold-backed funds. Still, many expect gold to remain supported in 2026.
