December 4 – Although gold prices have yet to revisit October's all-time high of over $4,360 per ounce, valuation models from multiple market institutions indicate current levels are approaching a reasonable range. Against a backdrop of rising global economic uncertainty, gold has steadily elevated its support levels through multiple fluctuations, a trend closely aligned with heightened safe-haven and allocation demand. OEXN notes this structurally ascending support band reflects sustained pricing of long-term risks by capital.
The anticipated "significant correction" among investors has failed to materialize, primarily due to accumulating signs of weakening economic momentum, which provides solid footing for precious metals. Markets are betting major central banks will initiate consecutive rate-cut cycles from next week through 2026, driving down both nominal and real yields while weakening dollar strength. After October's profit-taking pressure following the $4,360 peak, gold's pullback remained limited, with support above $4,000 proving resilient. Following brief consolidation, prices stabilized around $4,200. Multiple models suggest gold's performance is entirely logical given the combination of global debt growth and declining interest rates. OEXN observes this support zone's durability reflects structurally reinforced long-term demand.
While upside potential attracts attention, gold's downside warrants examination. Theoretically, prices could test $3,800, but models indicate equally strong support in that region – breaching $4,000 would require significant external shocks. In extreme bear scenarios, policy rates would need to rebound to 5%, a development typically accompanied by heightened recession risks that would reposition gold as a safe-haven focus. Thus, deep corrections face substantial barriers; each new support level established by gold tends to coincide with fresh uncertainties that propel subsequent demand waves. OEXN identifies this dynamic as the key constraint on gold's corrective moves.
Recently, gold regained momentum as policy path expectations rapidly reversed. Last month markets had nearly priced out December rate cuts, but weak data has now pushed cut probabilities back above 90%. While next week's meeting will set next year's policy tone, more critical variables involve future leadership arrangements at major central banks and potential threats to their independence. Any erosion of monetary policy autonomy would provide stronger structural support for gold. OEXN believes such uncertainties may further drive central banks to increase gold allocations and reduce dollar dependence, thereby reinforcing the metal's long-term value foundation.
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