Gold Breaks $4500, Surges 70% This Year! Should You Chase or Withdraw?
The madness of gold continues above historic highs.
As of December 23, the spot gold price first broke through the $4490 per ounce mark, with an increase of about 70% this year, achieving the best annual performance since 1979. This epic market trend has made gold the most dazzling asset class in 2025.
The three main engines driving gold prices up are still running at full speed. The escalation of geopolitical tensions has boosted safe-haven demand, market expectations of further interest rate cuts by the Federal Reserve in 2026 have lowered the opportunity cost of holding gold, and the demand for gold purchases by global central banks remains strong (with a net increase of 1045 tons of gold by global central banks in 2024), providing solid support for gold prices.
However, risks are always accumulating in the midst of celebration. The Relative Strength Index (RSI) of gold has entered the overbought area, indicating that the market may experience "short-term overheating." After reaching a peak in October, gold prices saw a pullback of nearly 10%, suggesting that the market will experience significant volatility during the process of reaching new highs.
Key positions determine short-term direction. Currently, the primary resistance level is at the psychological barrier of $4500, and a breakout could lead to further upward movement; initial support is around $4400, with stronger support located in the historical high breakout area of $4380.
For traders with different styles, strategies should vary:
Conservative traders can wait for a pullback to the $4380-$4400 range to gradually position themselves, setting a stop-loss below $4360.
Aggressive traders who see prices stabilize above $4475 can try a small long position, with a stop-loss set at $4450.
Short-term traders can attempt a short position in the $4490-$4500 range, with strict stop-losses, aiming for quick entries and exits.
The long-term bull market logic for gold remains unchanged—institutions like Goldman Sachs have given a basic prediction of $4900 per ounce for gold prices in 2026, and even believe that in extreme scenarios, it could hit $5000. However, in the short term, the market needs to digest recent gains, and fluctuations are inevitable.
Real opportunities belong to patient and disciplined investors @bit萧 .
