Lexus Gold Market Analysis: Surge and Drop to Close the Yearly Line
On December 24, during the Asian trading session, spot gold experienced a rollercoaster market, with prices breaking through the historical high to $4525 per ounce, followed by a significant drop, ultimately stabilizing around $4480 per ounce. Currently, the European and American Christmas holidays have begun, and the gold external market will be closed until next Tuesday, temporarily entering a stagnation phase.
The key reason for gold breaking through the historical high is the heightened risk aversion sentiment combined with market expectations for interest rate cuts. Geopolitical conflicts are escalating; this week, the U.S. has increased the deployment of several special operations aircraft and troops to the Caribbean region, paving the way for potential military actions against Venezuela, while the situation between the U.S. and Venezuela remains tense. The Cambodia-Thailand conflict is also brewing, with the Cambodian Ministry of Defense confirming that Thai warplanes dropped cluster bombs, and both sides are at an impasse with conflicting narratives; regarding the Russia-Ukraine situation, Zelensky has announced a 20-point peace plan draft, but core territorial disputes remain unresolved, and the Russian side does not recognize key aspects of the proposal, making a short-term ceasefire nearly impossible. Multiple geopolitical risks are pushing gold prices higher, but with the Christmas holiday approaching, many bulls are choosing to take profits, directly triggering the surge and drop in gold prices.
Looking back at the annual trend, gold is undoubtedly the most outstanding asset, with an annual increase of over 70%, marking the largest annual increase since 1979, perfectly concluding this year's market.
In the upcoming opening, two key influencing factors need to be closely monitored: first, the economic data that the U.S. is set to announce at the beginning of the month, which will directly affect market expectations for interest rate cuts; second, the annual weight rebalancing of the Bloomberg Commodity Index (BCOM) at the beginning of January 2026. Due to the significant increase in gold and silver this year, their index proportion will be adjusted downwards, and tracking funds are likely to sell off some gold and silver positions, putting short-term pressure on gold prices. The estimated scale of gold sell-offs is expected to account for 3% of its total outstanding futures contracts, and this selling pressure should not be underestimated.
From the 1-hour chart, gold has surged and dropped, with the K-line closing below the moving average, breaking the previous days' upward momentum, which is completely consistent with my prediction yesterday that "the upward momentum before the holiday is insufficient, do not chase the long positions." For the subsequent trend, in the short term, gold is likely to continue its weakening trend at next week's opening; from a long-term perspective, geopolitical risks are unlikely to dissipate, and central banks around the world continue to increase their gold holdings.
