Gold Price Prediction: Prices dip from record highs; volatile Christmas week ahead - What experts warned

Gold Price Prediction: Following a blockbuster 2025 where domestic gold prices soared by over 70 per cent, the precious yellow metal seems to take a breather as the market is entering a Christmas holiday-driven consolidation phase. With major global exchanges beginning their Christmas recess on Wednesday, December 24, reduced liquidity is expected to thin out trading volumes. Experts warn that these 'thin' market conditions could lead to heightened volatility, with potential price swings of 2–3 per cent in either direction

The prices of domestic gold dropped by Rs 1,300 per 10 grams from the lifetime peak of Rs 1,35,590 with the February gold futures on the Multi Commodity Exchange (MCX) ending flat on Friday at Rs 1,34,206, though the bias was positive, reported Economic Times.

Decoding the current trends, Renisha Chainani, Head - Research at Augmont, expects the prices of gold to consolidate around its high of Rs 1,35,000. She said a breakout or breakdown could trigger a rally of 2 per cent to 3 per cent on either side. The expert sees near-term resistance around the peak.

Profit-booking during the late hours of the previous session saw silver futures for the March contract retreat by 0.21 per cent (or Rs 439 per kg). The metal settled at FRs 2,08,000, just shy of its new all-time high of Rs 2,08,603.

The analyst suggest that while silver has met immediate resistance at the Rs 2,08,000 mark, the broader uptrend remains healthy as long as prices stay above the Rs 1,94,000 support level.

Should the rally resume, Chainani said the next key resistance targets are pegged at Rs 2,18,000 and Rs 2,24,000.

Chainani further noted that geopolitical tensions between the United States and Venezuela, combined with robust industrial and investment demand, might provide some support to gold.

She also sees a 0.75 bps benchmark rate hike by the Bank of Japan (BoJ) as a positive for precious metals.

While India’s Multi-Commodity Exchange (MCX) will be closed only on Thursday, December 25 for Christmas, US markets will reopen for trading on Friday, December 26, while markets in the UK, Germany, France, Canada and Hong Kong will remain shut.

Silver futures, however, showed mixed trends. The white metal opened lower in the morning trade but later turned positive. The metal for the March 2026 contract surged by Rs 1,628, or 0.8 per cent, to Rs 2,05,193 per kilogram in 13,157 lots.

In the international markets, Comex gold futures for February delivery slipped by USD 10.1, or 0.23 per cent, to USD 4,354.4 per ounce.

"Gold traded around USD 4,350 per ounce, near its October record high and on track for a second weekly gain, as softer-than-expected US inflation strengthened expectations of further interest-rate cuts," said Jigar Trivedi, Senior Research Analyst at Reliance Securities, as quoted by PTI.

On the other hand, silver soared to a record high on Friday, bolstered by investment ‌demand and a supply tightness, while gold eyed a weekly ‌gain, buoyed by increasing expectations of interest rate cuts by the U.S. Federal Reserve.

Spot silver added 2.3% to $66.96 an ounce, set to ⁠end the week 8.1% higher after hitting a record high of $67.20 in the session.

Spot gold rose 0.3% to $4,346.69 an ounce as of 11:38 a.m. ET (1638 GMT), and was set to ⁠log a weekly gain of over 1%. U.S. gold futures gained 0.4% to $4,380.

"(Gold and silver) are highly correlated and typically gold leads but the last two months, we saw silver lead. So, whenever you ‌see spread that wide, people will start to pick on gold ‍and tighten on it in the short term," said Michael Matousek, head trader at U.S. Global Investors.

Silver has soared 132% this year, far outpacing gold's 65% rise, driven by robust investment demand and supply constraints.

Meanwhile, US inflation data showed that consumer price inflation for November slowed to 2.7 per cent, below market expectations of 3.1 per cent, while core CPI eased to 2.6 per cent, its slowest pace since March 2021.

Separately, the U.S. Labor Department reported earlier this week that the unemployment ‌rate rose to 4.6% in November, the highest since September 2021.

Trivedi added that the data reinforced expectations that price pressures are easing, and strengthened the case for potential Federal Reserve rate cuts.

However, he noted that the data was partly constrained by a federal shutdown, which disrupted the Bureau of Labor Statistics' collection of October prices and month-on-month analysis.

Meanwhile, silver futures for March 2026 contract was trading 1.37 per cent higher at USD 66.11 per ounce in the overseas trade.

"Investors are currently pricing a probability of 25 per cent chance of a rate cut in January (by the US Fed), with near certainty by April. Also, rising geopolitical tensions have also supported the white metal prices," he said.

Platinum added 3.2% to $1,977.85 after touching a more than 17-year ⁠high on Thursday. Palladium was 0.4% up at $1,701.75 after hitting a nearly three-year high earlier in the session. Both metals were set for weekly gains.

(With inputs from agencies)