Gold prices are set to rise over 60% this year, achieving the largest annual increase since 1979. Back then, crises and high inflation drove Gold prices up. This year, record prices hit a peak of $4,380 per troy ounce in October.

Impact of US Policies

Uncertainty from US policies has increased the demand for Gold as a safe investment, making the US dollar less attractive. This has led to a significant investment in Gold ETFs. The expected easing of US monetary policy is likely to push Gold prices even higher next year. Central banks are buying large amounts of Gold to diversify their reserves. This trend is expected to surpass levels from before 2022, partly due to global tensions. While high prices may reduce physical demand, especially for Gold jewelry, strong investment interest could balance this out. We expect prices to rise to $4,400 per troy ounce next year. Gold has performed exceptionally well this year, achieving its best gain since the late 1970s. As of December 2nd, 2025, prices are just below the October record of $4,380, suggesting a possible rise to the $4,400 target in the next year. Breaking the recent high could signal even more gains ahead. We expect meaningful easing of monetary policy from the Federal Reserve, which is a major factor for rising gold prices. Recent inflation news indicates a gradual decline to 3.1% in October, giving more support to advocates for rate cuts in early 2026. This strengthens the view that Gold prices are likely to keep rising, especially since the dollar is becoming less appealing as a safe haven.

Gold Derivatives and Market Strategy

In the derivatives market, consider looking at call options with strike prices at or above the $4,400 level for early 2026 expirations. It may also be wise to take long positions in gold futures contracts, particularly during price dips or if prices break decisively above previous highs. Implied volatility is high, indicating the market expects significant price movements after a period of stability. This positive outlook is bolstered by continued strong demand from central banks diversifying their reserves. Recent data from the World Gold Council for the third quarter of 2025 showed near-record purchasing levels, a trend that accelerated after the freezing of Russian assets in 2022. These large buyers provide strong support for the market. Although high prices have reduced physical demand for jewelry, significant investments into gold ETFs are on the rise, with another positive inflow in November. For a more conservative approach, selling out-of-the-money put options may be a good strategy. This allows for earning premiums while maintaining a bullish-to-neutral outlook on gold prices in the weeks ahead. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now