Gold Climbs to Seven Week High as Dollar Weakens, Rate Cuts Loom

On Friday, Dec. 12, 2025, gold rallied to its highest level in seven weeks as investors sought protection from market uncertainty, driven by a softer U.S. dollar and mounting expectations that the Federal Reserve will begin easing policy. Reuters reported an intraday advance of about 1 percent to the session peak, while CNBC recorded spot gold at $4,293.43 per ounce later in the session, up roughly 0.3 percent from earlier levels. U.S. gold futures settled 0.4 percent higher at $4,328.30 per ounce, reflecting some profit taking after the earlier surge.

Traders attributed the rally to a cluster of familiar drivers. A weaker dollar made bullion relatively cheaper for holders of other currencies, while markets priced in a greater likelihood of rate cuts by the Fed in 2026. Geopolitical tensions also boosted safe haven demand as investors reassessed risk exposures in the face of ongoing conflicts and strained trade relations globally. Market reports highlighted mixed signals from policymakers on the timing of rate relief, a factor that kept volatility elevated and supported inflows into gold.

Silver saw even more dramatic intraday moves, illustrating the speculative pulse beneath the broader metals market. CNBC said spot silver climbed to a record $64.64 per ounce earlier in the session before falling about 3 percent to $61.70 as traders booked profits. Reuters similarly noted multi week peaks in silver, consistent with heightened short term positioning and rapid reversals once earlier buyers locked in gains.

Beyond the session level moves, analysts point to structural forces that have bolstered bullion this year. Commentary from CME Group emphasized that central banks worldwide continue to diversify reserves away from the dollar and are buying record quantities of gold. That institutional demand has supported prices even when the traditional inverse correlation between the dollar and gold breaks down. CME Group recalled that gold surged to $3,149.40 per ounce on April 10, 2025 and went on to set a record high on April 22, highlighting the scale of the market's rally earlier in the year.

For markets, the immediate implication is that gold will remain sensitive to both macroeconomic signals and episodic geopolitical shocks. A sustained weakening of the dollar or a clearer path to Fed easing would likely extend the rally, while a sudden reacceleration of U.S. inflation or a hawkish pivot by major central banks could pull bullion back. Over the medium to long term, persistent central bank purchases and geopolitical uncertainty suggest a higher floor for gold prices than seen in previous cycles.

Investors watching the Fed, currency moves and geopolitical developments should expect ongoing volatility in precious metals. The Dec. 12 episode underlined how quickly intraday peaks can differ from settlement readings, and how short term profit taking can produce sharp reversals even amid broader structural support for bullion.