Gold prices slipped on Wednesday, after climbing above the US$4,350 level as expectations of future United States interest rate cuts and persistent geopolitical tensions continued to support demand for the safe-haven asset.
The precious metal has surged about 65% over the course of the year and is on track to post its strongest annual gains since 1979.
By 4:10 pm AEDT (5:10 am GMT), spot gold had eased 0.2% to US$4,333.00 per ounce, as some investors locked in profits following the recent advance.
Silver prices also tumbled 5.9% to $71.62/oz.
Gold’s rally has been underpinned by growing expectations that the U.S. Federal Reserve could begin cutting interest rates again in 2026.
Lower rates reduce the opportunity cost of holding non-yielding assets such as gold, making the metal more attractive to investors.
Geopolitical risks have also remained a key driver. Ongoing tensions between Israel and Iran, along with continued friction between the United States and Venezuela, have reinforced safe-haven demand.
However, some factors could limit further upside. The Chicago Mercantile Exchange’s decision to raise margin requirements on gold and silver futures may encourage profit-taking and portfolio rebalancing heading into 2026.
In addition, reports of progress toward a potential peace deal in Ukraine could ease geopolitical risk premiums and weigh on prices.
Market participants are also watching for the release of U.S. initial jobless claims data later on Wednesday. Economists expect a modest increase in new claims to 220,000 for the week ending 27 December, up from 214,000 the previous week.
Trading volumes are likely to remain thin as markets head into the New Year holiday.
