## Gold Price Surges Above $4,378, Reaching New Highs Driven by Multiple Factors

In Friday’s Asian market session, spot gold performed remarkably, breaking through the $4,378 per ounce level, with a single-day increase of nearly $60. Behind this strong momentum are three converging forces: expectations of Fed rate cuts, geopolitical tensions, and risk aversion sentiment.

## The Fed Rate Cut Cycle Becomes the Main Focus

The Federal Reserve announced a 25 basis point rate cut at the December meeting, bringing the federal funds rate to the 3.50%-3.75% range. The market generally expects further easing in 2026. The FOMC minutes show that most members believe that as long as inflation continues to decline, maintaining accommodative monetary policy is appropriate, providing medium- to long-term support for gold.

In a low-interest-rate environment, the opportunity cost of holding non-yielding precious metals decreases, logically supporting higher gold prices. Market confidence in the Fed’s easing cycle is gradually translating into increased allocation demand for gold.

## The Power of Safe-Haven Demand Cannot Be Ignored

Geopolitical risks continue to boost gold’s appeal. Ongoing conflicts such as Israel-Iran tensions and US-Venezuela tensions remain unresolved, with uncertainties persisting. In such environments, traders tend to increase holdings of traditional safe-haven assets like gold, resulting in stable capital inflows.

Gold has gained approximately 65% throughout 2025, marking the highest annual growth rate since 1979, fully reflecting the sustained strength of safe-haven demand.

## CME Margin Adjustments Trigger Chain Reactions

The Chicago Mercantile Exchange has raised margin requirements for gold, silver, and other precious metal futures. This means traders need to allocate more capital to maintain their positions, to mitigate potential delivery risks. In the short term, this may force some high-leverage longs to reduce their positions, further amplifying price volatility.

## Balancing Technicals and Risks

From the chart perspective, gold prices have maintained high-level fluctuations after a significant rise, with the overall trend remaining strong. The $4,300 per ounce level has become a key support. If this level holds, gold may continue to challenge higher levels.

However, technical indicators are approaching overbought levels, suggesting a possible short-term correction or consolidation. Traders should be cautious of the following risks: first, profit-taking pressures are accumulating; second, if US economic data improve, the dollar may experience a phase rebound, exerting downward pressure on gold; third, CME margin adjustments could trigger stop-loss cascades.

## Gold Outlook and Analysis

In the medium to long term, expectations of rate cuts combined with safe-haven demand provide a solid foundation for further upside. Central banks’ continued gold purchases and strong institutional allocation demand will continue to underpin gold prices.

For short-term trading, a strategy of buying on dips is recommended, but risk exposure must be carefully controlled. Close attention should be paid to US economic data and the dollar’s direction. During high-volatility periods, traders should adjust their positions flexibly to avoid being forced out by short-term fluctuations.