On December 29, 2025 (GMT-5), XAU/USD navigated a highly volatile session characterized by a sharp initial decline and subsequent robust rebound, all against a backdrop of diminished year-end market liquidity that amplified price swings. Trading within a broad range of $4,420 to $4,505, the pair’s early selloff was catalyzed by the Chicago Mercantile Exchange’s (CME) gold futures margin hike, which forced leveraged market participants to liquidate positions en masse; this downward pressure was further exacerbated by year-end profit-taking activity, portfolio rebalancing flows, and a modest technical recovery in the U.S. dollar index (closing at approximately 97.70). Notably, the dollar’s strength remained a corrective move, as market expectations for Federal Reserve rate cuts in 2026 continued to act as a long-term headwind. The late-session rebound was underpinned by the persistence of core bullish fundamentals: sustained safe-haven demand tied to ongoing geopolitical tensions, consistent central bank gold acquisitions amid elevated sanctions risks, and bargain-hunting from gold-backed ETF investors. The pair ultimately closed near $4,480, retaining the bulk of its recent gains and keeping its year-to-date advance above 69%. Looking ahead, the short-term market bias has shifted to bearish territory, with a projected target price of $4,334.43.
This is just for learning and sharing purposes—not financial advice! Trade at your own discretion, and you’re fully responsible for any gains or losses.