Gold pulls back as the Fedβs hawkish tone shakes market confidence. πβ¨ Despite expectations for policy easing after the December FOMC meeting, Jerome Powell is likely to lean hawkish in his remarks and thatβs putting pressure on precious metals.
π» Bears are eyeing a deeper correction, with some looking for gold to slip below $4,000 as momentum in the easing cycle fades. Derivatives markets have already scaled back forecasts from three rate cuts in 2026 to just two.
π Meanwhile, goldβs explosive 60% rally this year was sparked by institutional safe-haven buying after major US tariffs and later fueled by retail investors β tying gold more closely to risk assets.
π Demand remains strong from ETF buyers in China and India, with global precious-metal ETF reserves hitting a record 3,932 tonnes after adding more than 700 tonnes in 2025.
π¨π³ The peoples bank of China has now increased its gold reserves for 13 straight months β but potential progress in Ukraine peace talks could slow or reverse this trend.
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