Photo by Jingming Pan on Unsplash
 

Gold (XAUUSD) is holding firm near multi-year highs as macro and geopolitical forces continue to drive demand. The Federal Reserve’s recent rate cut and signals of further easing have boosted gold’s appeal. At the same time, global tensions remain elevated, driving demand for safe-haven assets. Despite minor pressures from margin hikes and holiday-driven volatility, the broader trend stays bullish. Strong momentum and a supportive backdrop suggest gold may push higher as 2026 approaches.
 

Gold Supported by Fed Easing Outlook and Geopolitical Tensions

The US Federal Reserve’s decision to lower rates by 25 basis points in December added fuel to gold’s rally. The move brought the federal funds rate down to a 3.50%–3.75% range, which increased expectations for further easing in 2026. Fed officials highlighted rising downside risks to employment and declining inflation, making the case for continued policy support. Lower rates reduce the opportunity cost of holding non-yielding assets like gold, enhancing its appeal.

However, the Fed showed clear divisions. Stephen Miran called for an even larger cut, while others pushed to hold rates steady. The FOMC minutes revealed that most officials support further rate reductions if inflation continues to ease, though debate remains over timing. Markets responded by trimming bets on a January cut, with FedWatch probabilities slipping to around 15%. Despite that, the outlook still favors lower rates, keeping gold supported.

Meanwhile, geopolitical tensions remain elevated. The ongoing Israel-Iran conflict and US-Venezuela friction continue to boost safe-haven demand. Historically, rising global instability has benefited gold, and current conditions reflect that pattern. Additionally, margin requirement hikes by the CME Group added short-term pressure, yet the broader risk environment continues to attract buyers. Thin holiday trading volumes may influence near-term price swings. Anticipation around upcoming US jobless claims data could also add to short-term volatility.
 

Gold Eyes Channel Resistance as Technical Structure Remains Strong

The gold chart below shows a well-defined ascending channel that has guided price action for more than a decade. The 2011 peak near $1,920 marked the top of the channel at the time, followed by a multi-year correction. That pullback formed a broad consolidation base within the lower half of the channel. The eventual breakout from that base signaled the start of a new structural uptrend.
 

(Click on image to enlarge)

An inverted head and shoulders pattern formed between 2020 and 2024, with each low marking a higher base along the lower boundary of the channel. These patterns served as bullish continuation signals. Once gold cleared horizontal resistance levels, the rally gained momentum and lifted the price toward the midline of the channel. From that point, momentum accelerated sharply, with price action respecting the upper trendline as a potential resistance zone.

Now, gold is approaching the top boundary of the ascending channel once again, just as it did in 2011. The prior rejection from this level triggered a long correction. However, the current move appears more sustainable, with broad macro support and clear technical confirmation. Price action remains above all key moving averages, and no signs of exhaustion are evident yet. A temporary pullback from the upper band may occur, but it would likely be seen as a consolidation within a broader uptrend.
 

Gold Outlook: Strong Macro and Technical Setup Signals More Upside

Gold remains in a strong uptrend as supportive macro forces and elevated geopolitical risk continue to drive demand. Lower interest rates and expectations for further policy easing in 2026 keep gold attractive. Technically, price holds above key averages and continues to respect a long-term rising channel. Even if a short-term pullback develops near resistance, the broader structure points to continued strength as gold moves into 2026. 

More By This Author:

Gold Retreats From Highs But Fed Policy And War Risk Keep Demand Elevated
Gold Holds Steady As Economic Weakness And Fed Outlook Support Upside
Gold Maintains Uptrend As Fed Turns Dovish And Market Risks Intensify