Gold (XAU/USD) attracts renewed buying interest on Tuesday after a brief late pullback from above the $5,100 level, its all-time high. The precious metal remains firmly bid for the seventh consecutive session, supported by persistent safe-haven flows and a broadly weaker US Dollar (USD). The greenback continues to struggle near its lowest level since September 2025, weighed down by concerns surrounding US President Donald Trump’s trade policies and growing expectations of a more dovish US Federal Reserve (Fed). These factors continue to provide a strong tailwind for the non-yielding yellow metal.
In addition, ongoing geopolitical tensions further underpin demand for Gold prices, which remains resilient despite a generally positive tone across broader risk markets. That said, some traders may prefer to stay on the sidelines ahead of Wednesday’s key Fed policy announcement. Investors will closely monitor the outcome of the meeting for clearer guidance on the central bank’s rate-cut trajectory, which is expected to influence both the USD and Gold prices. Still, the prevailing fundamental backdrop suggests that the path of least resistance for bullion remains to the upside.
Daily Digest Market Movers:
-
US President Donald Trump stated on Saturday that a 100% tariff would be imposed on Canada if it proceeds with a trade agreement with China. This follows earlier tariff threats related to Greenland, later withdrawn, and adds fresh uncertainty to global trade dynamics.
-
Elevated geopolitical risks from the prolonged Russia–Ukraine war continue to fuel safe-haven demand. Combined with a weaker USD and dovish Fed expectations, this has helped push Gold prices higher for a seventh straight day.
-
Policy-related shocks from the Trump administration have dented confidence in the US Dollar within global financial markets. Expectations for at least two additional Fed rate cuts this year dragged the USD to a four-month low on Monday.
-
On the data front, the US Census Bureau reported that Durable Goods Orders surged 5.3% in November, significantly beating market expectations of 0.5%. Orders excluding transportation rose 0.5%, while those excluding defense increased 6.6%.
-
Meanwhile, Russia reiterated its demand that Ukraine cede the entire Donbas region as part of any peace agreement. Ukraine rejected the proposal, and US-brokered talks in Abu Dhabi ended without a deal on Saturday.
-
The USD selling pressure has eased slightly as market attention remains firmly on the two-day FOMC meeting, with investors awaiting further clarity on the Fed’s policy outlook.
-
Fed Chair Jerome Powell’s post-meeting press conference could trigger volatility across markets, particularly for Gold, amid continued central bank purchases and strong ETF inflows.
-
The People’s Bank of China (PBOC) extended its gold-buying streak for a fourteenth consecutive month in December. The National Bank of Poland, Reserve Bank of India, and the Central Bank of Brazil were also active buyers in late 2025 and early 2026.
-
Global investment demand for Gold prices via exchange-traded funds rose 25% in 2025. Total Gold prices holdings increased to 4,025.4 tonnes from 3,224.2 tonnes in 2024, while total ETF assets under management climbed to $558.9 billion.
