Gold (XAU/USD) Jumps 2.4% and Breaches $4450/oz on Heightened Geopolitical Risk. Are Further Gains in Store for XAU/USD?

[Ben Graham]

Gold appears to be the gift that keeps on giving in 2025 as the precious metal surged another 2.4% putting it in sight of the $4500/oz handle.

It has been a stellar year for the precious metal with AI optimism leading discussions and yet the precious metal beat overall stock performance by some distance. Gold is up around 66% YTD while stocks (S&P 500) are only up 17%.

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Source: GoldNuggets, LSEG

The move comes at an interesting time as market participants have begun to really question the conventional monetary system. The attack on the Federal Reserve by US Government officials have not helped matters as market participants ponder the independence of the Fed and a weak US Dollar.

Is this a sign of a fracture in the global monetary order?

Most Read: Palladium (XPD/USD) on Track for $2,000 as Metals Rally Extends – Price Outlook

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Source: GoldNuggets, LSEG

Either way the current rally is impressive and needs to be studied and monitored as market participants are currently eyeing a continued rally in 2026.

Geopolitical Risk Drives Recent Rally?

Over the last week Geopolitical risk has ratcheted up across the globe with various conflicts looking on the precipice of chaos. These include the Russia-Ukraine situation, US-Venezuela and in the last 48 hours Israel-Iran.

This is keeping the demand for safe haven assets strong.

The divergence between the Fed outlook, market expectations and recent US data are also adding fuel to the fire. The most recent batch of data from the US which included jobs and inflationary data have both been softer than expected.

This has led to market participants starting to price in more aggressive rate cuts once more which is also impacting the US Dollar and thus Gold prices.

What Comes Next for Gold Prices?

Looking ahead, the lack of US data this week may be a challenge for Gold bulls looking for the rally to continue.

The focus in the coming days may rest on the geopolitical risk angle which continues to intrigue and frustrate in equal measure. Without delving too deep into the specifics, any escalation on any front may result in further haven demand.

Liquidity may continue to thin ahead of Christmas day and this may also scupper any further major moves. However, I could be wrong given that I assumed this entire week may see limited moves which of course has not been the case.

There is some high impact US data ahead tomorrow in the form of GDP 3rd quarter release. Market consensus is for a YoY print of around 3.2%.

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Technical Outlook - Gold (XAU/USD)

Looking at the four-hour chart below, the technical picture is decent for bullish continuation.

The one concern for bulls is that the period-14 RSI is in overbought territory which means a pullback could materialize.

The lack of historical price action makes the technical picture abit more cloudy but i will focus on whole numbers.

The 4450 mark is key but any pullback that holds above the 4400/oz handle could be a good opportunity for potential longs to get involved.

Gold (XAU/USD) Four-Hour Chart, December 22, 2025

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Source: TradingView (click to enlarge)

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