By Chris Weston, Head of Research at Pepperstone
Gold looks set to close out 2025 with the buyers once again stepping up and asserting dominance, as they have done for much of the year. Recent price action and the technical set-up continue to offer traders a positive skew in their probability assessment around the near-term directional risk. The client order flow we’re seeing on the desk remains heavily biased to the buy side, with a clear positive expectancy that spot gold (XAUUSD) can push through the $4347/53 supply zone that capped the upside on Friday and Monday – subsequently, a decisive break above $4353 will offer the gold bulls a clear run at the all-time highs at $4381. Given the strength of the buying pressure that is evident in the recent price action, it feels increasingly feasible that the yellow metal will soon test, and potentially break, this key level.
We are also maintaining a strong focus on the volume and order flow in front-month gold futures, as this is where institutional leveraged players are most active. If XAUUSD is to kick higher, it will likely be driven by gold futures – currently trading around $4356 – pushing through $4387 and pulling the spot price along with it in the process.
With US payrolls now behind us, traders looking to build positions may show some reluctance to go too hard on positioning, wary of being overly exposed to the upcoming US CPI inflation report. That said, gold bulls will take some comfort from the metal’s strong performance and fine form around prior US core CPI releases. To quantify, over the past 12 months, gold has rallied in the six hours following the US CPI print in 90% of instances, regardless of whether the inflation data surprised to the upside or downside. While this time may be different, but any outcome that keeps Fed rate cuts in play for 2026 is likely to be sufficient to attract buyers and provide a fitting end to one of the best-performing markets of 2025.