Gold Price Predictions: Trends and Market Outlook for December 2025

Gold prices are projected to increase in the domestic market as the Indian rupee remains under pressure. This assessment comes from Praveen Singh, a Senior Fundamental Research Analyst at Mirae Asset Sharekhan, who has provided insight into the current market dynamics surrounding gold.

Market Performance

On December 15, spot gold prices exhibited volatility, fluctuating between $4,285 and $4,351. This instability was evident as traders approached the release of the US job report scheduled for Tuesday. The price of gold faced resistance near $4,353, which was the high recorded on December 12, marking the most significant level since October 21. At the time of this report, gold was trading steadily around $4,304.

The recent performance of gold was bolstered by a dovish outcome from the Federal Open Market Committee (FOMC) meeting held on December 10. The Federal Reserve reduced the federal funds rate by 25 basis points to a range of 3.5% to 3.75% and announced plans to purchase $40 billion worth of US Treasury bills each month for several months. As a result, spot gold concluded the week with a substantial gain of 2.5%, closing at $4,302. However, gold prices retracted slightly on Friday due to mixed statements from Federal Reserve officials regarding the future of monetary policy.

Economic Data Influences

Disappointing economic data from China was released on December 16, revealing that new home prices fell by 0.39% in November, marking the 30th consecutive monthly decline. Retail sales growth in November was only 1.3%, significantly below the forecast of 2.9%, representing the slowest increase since December 2022. Industrial production rose by 4.8%, slightly below the anticipated 5%. Additionally, fixed asset investments in rural areas declined by 2.6% year-on-year, contrasting with the expected decrease of 2.3%, as residential property sales fell by 11.2% year-to-date.

In the United States, economic indicators released on December 15 also disappointed. The December Empire State Manufacturing Index registered at -3.9, significantly lower than the expected figure of 10. The National Association of Home Builders (NAHB) Index, however, met expectations at 39, the highest reading since April, although it remains below 50, indicating that more builders view conditions as poor rather than favourable.

Investment Trends

As of December 12, global gold exchange-traded fund (ETF) holdings reached 98.33 million ounces, the highest level since October 23, with an increase for the third consecutive week. Year-to-date, holdings have risen by 18.69%, amounting to 15.48 million ounces or approximately 482 tons. Over the past two weeks, gold ETFs attracted a net inflow of around 25 tons. In contrast, registered gold inventory on the COMEX stood at 18.95 million ounces, the highest since February 2 but down by 21.88% from the record high of 24.25 million ounces observed on April 7, as investors gravitate towards physical ownership in uncertain times.

Zimbabwe has announced plans to introduce a gold ETF by June 2026, having accumulated 4.02 tons of gold.

Federal Reserve Insights

US President Joe Biden is reportedly considering Kevin Warsh and Kevin Hassett as potential successors to current Federal Reserve Chair Jerome Powell. New York Federal Reserve President John Williams stated that US monetary policy is well positioned for the upcoming year following the rate cut in December. He anticipates that economic growth will be supported by fiscal policy and investments in artificial intelligence, while inflation may dip slightly below 2.5%. Federal Reserve Governor Christopher Waller is scheduled to speak regarding the economic outlook at the Yale CEO Summit on December 17.

Market Expectations

As of the latest updates, the US Dollar Index was slightly lower, at 98.35. Two-year US Treasury yields decreased by nearly 2 basis points to 3.50%, while ten-year yields remained unchanged at 4.18%. US Treasuries have returned 6% this year, despite ongoing fiscal and inflation worries. This performance is attributed to companies not yet fully passing on tariff costs to consumers, along with narrowing tariff revenues helping to reduce the deficit. Additionally, the Federal Reserve's decision to cut rates maintains an easing bias.

Geopolitical Considerations

Negotiations between Ukrainian and US officials in Berlin regarding the ongoing conflict in Ukraine have reportedly been optimistic, with nearly 90% consensus on the issues discussed. However, territorial disputes between Ukraine and Russia continue to pose significant challenges.

India's Gold Imports

In November, India's gold imports totalled $4.02 billion, reflecting the nation's ongoing demand for gold in various sectors.

Looking Ahead

Upcoming data from the US Bureau of Labor Statistics, including nonfarm payroll figures for October and November, is expected to be released on December 16. Analysts predict that the unemployment rate may rise from 4.4% in September to 4.5% in November. The US Consumer Price Index (CPI) report for November will follow on December 18, marking the first CPI report in two months.

In a significant development, the Pension Fund Regulatory and Development Authority in India is planning to permit pension funds to invest in gold and silver ETFs. This initiative allows for 1% of the pension fund corpus under the alternative investment category to be allocated for these commodities. The National Pension System, which oversees approximately $177 billion, was established two decades ago.

Gold Price Forecast

With the dovish stance of the Federal Reserve and ongoing geopolitical tensions, gold prices are well-positioned to extend their rally. The US job market's uncertainty, highlighted by concerns expressed by Federal Reserve Chair Jerome Powell, adds to the appeal of gold as a safe-haven asset. Unless the upcoming nonfarm payroll data indicates strong job growth, gold is likely to maintain a positive bias. Support levels are identified at $4,245, $4,230, and $4,183, while resistance is found at $4,354, $4,382 (an all-time high), and $4,500. Analysts recommend maintaining long positions with strict stop-loss measures in place, particularly due to the weakness of the Indian rupee amid tariff-related concerns.