02 December 2025

Gold Market Outlook – Is a Santa Rally Coming?

Motasm Adel

26 November 2025

Gold begins today’s session trading near 4,157 USD, sitting at a critical intersection of both technical structure and shifting macroeconomic expectations. With markets pricing in lower inflation, softer consumer-behavior indicators and a high likelihood of interest-rate cuts in early 2026, gold’s next decisive move may be approaching sooner than expected.

Despite the bullish long-term narrative, the metal is currently struggling to maintain momentum, making today’s levels especially important for traders assessing whether a deeper correction or early-stage rally is likely.

Technical Landscape

Current price: 4,157
Key support: 4,106
Key resistance: 4,218

Gold is now positioned between two major structural zones that will determine the short-term and medium-term market direction.

Bearish Scenario: Wave 3 Completion Toward 3,892

If gold breaks and closes below 4,110, the structure strongly favors continuation of the current corrective leg, potentially evolving into a clear third wave decline.

The projected downside target stands near 3,892, which aligns with:

Fibonacci expansion projections
Prior liquidity pools
Fresh unmitigated demand zones
Wave-structure requirements for a complete corrective cycle

The rationale for this bearish move is reinforced by the macro backdrop:

Lower inflation readings
Softer consumer-based indicators (CB sentiment, spending, credit conditions)
Market expectations already pricing in rate cuts, reducing incremental bullish catalysts

In short, if gold cannot defend 4,110, a deeper correction is not only possible but structurally healthy before the next major rally phase begins.

Bullish Scenario: Early Breakout Toward a Santa Rally

Despite current corrective behavior, the bullish framework remains intact as long as price holds above the primary support region. The critical level for a confirmed bullish continuation is a clean daily close above 4,217–4,218.

A breakout above this ceiling would signal that buyers are absorbing supply and positioning early for:

Year-end flows
Anticipation of 2026 monetary easing
Portfolio re-balancing toward safe-haven assets
Potential slowdown in the U.S. labor market that would accelerate dovish Federal Reserve expectations

Under this scenario, the anticipated Santa Rally for gold could begin sooner than expected, pushing price toward new highs before the year-end cycle completes.

Fundamental Considerations

Even as gold trades near record territory, the macro narrative remains mixed:

Inflation continues to cool:
Lower CPI and PCE readings reduce pressure on the Federal Reserve, increasing the likelihood of a rate cut path.
Markets have priced in policy easing:
With expectations already elevated, gold struggles to gain incremental momentum without fresh catalysts.
Dollar stability adds pressure:
A stable or slightly stronger USD limits immediate upside potential for gold, especially during corrective phases.
Geopolitical and global risk dynamics:
Safe-haven flows remain selective, supporting gold over the long run but failing to generate explosive short-term moves without a technical breakout.

Conclusion

Gold sits at a pivotal moment. The market is watching two key prices:

Below 4,110: signals a decline toward 3,892 as the corrective third wave develops.
Above 4,217: opens the door to an early Santa Rally, with bullish continuation toward higher targets.

Until one of these levels gives way, consolidation and volatility are expected. Gold’s long-term outlook remains constructive, but today’s price action will shape the path and timing of the next major movement.

By Motasm Adel
Market Researcher and Analyst

Risk Disclaimer: This article is for educational purposes only and does not constitute investment advice. Financial markets involve risks, and past performance is not indicative of future results. Always conduct your own analysis and consult with a professional advisor before making investment decisions.