Photo by Dmitry Demidko on Unsplash
 

Gold (XAUUSD) has pulled back from record highs as year-end profit-taking and a stronger US Dollar weighed on prices. However, the broader outlook remains bullish. Expectations for further Fed rate cuts, elevated geopolitical risk, and political uncertainty continue to support safe-haven demand. At the same time, gold maintains a strong technical structure, signaling that the uptrend remains intact despite short-term consolidation.

Gold Finds Strength in Fed Policy Shifts and Rising Global Tensions
 

Gold is undergoing a short-term pullback after reaching record highs, but the broader trend remains firmly supported. The US Federal Reserve cut rates three times this year and is expected to lower rates again in 2026. Market participants now price in at least two more cuts next year. Lower interest rates reduce the opportunity cost of holding gold, which carries no yield, making it more attractive as a long-term store of value.

Political headlines have also contributed to demand. Former President Donald Trump recently stated he would appoint a Fed Chair who supports low interest rates and aligns with his policy direction. The comment sparked renewed concern over central bank independence. Political influence on monetary policy raises uncertainty and boosts demand for safe-haven assets like gold.

Meanwhile, geopolitical risk remains elevated. Trump reported “progress” on Ukraine peace talks but acknowledged no breakthrough on key territorial issues. The ongoing conflict and lack of resolution continue to fuel market caution. The combination of global unrest and economic stress keeps gold well positioned as a hedge.

Gold Pulls Back from Highs but Maintains Bullish Wedge Structure
 

The gold chart below shows price rising within a well-defined ascending wedge that has developed since late 2024. The price action respected both upper and lower boundaries multiple times throughout the year. This long-standing structure reflects a steady and well-defined bull market supported by strong trend momentum.
 

Gold recently approached the upper boundary of the rising wedge near $4,550 before pulling back sharply. Previous interactions with this resistance zone also led to temporary corrections during earlier retests in 2025. The current retreat is consistent with this historical pattern and does not indicate a trend reversal. Rather, it reflects short-term profit-taking as the year ends.

Despite the pullback, the chart shows a series of higher highs and higher lows within the wedge. This structure supports the continuation of the broader uptrend. As long as gold remains above the mid-point or lower boundary of the wedge, the bullish setup remains intact. A break above the upper line would signal an acceleration phase with potential for steeper gains in 2026.

Conclusion: Gold Remains Poised for Further Gains after Temporary Setback
 

Gold has pulled back from record highs, but the long-term trend remains strong. The current dip reflects short-term profit-taking and Dollar strength, not a structural shift. Fed rate cut expectations, ongoing geopolitical tensions, and macroeconomic imbalances continue to drive safe-haven demand. Technically, gold still trades within a rising wedge pattern, marked by higher lows and steady momentum. As long as it holds within this formation, the broader bullish outlook stays intact heading into 2026. 

More By This Author:

Gold Holds Steady As Economic Weakness And Fed Outlook Support Upside
Gold Maintains Uptrend As Fed Turns Dovish And Market Risks Intensify
Gold Strengthens On Fed Rate Cut Expectations, Dollar Pressure, And Rising Global Demand