Gold has always had a knack for capturing global attention, but the final days of 2025 have delivered a particularly dramatic display of its volatility and enduring allure. After a year marked by record-setting rallies, shifting central bank policies, and spiking demand amid geopolitical uncertainty, gold prices across the world have taken investors and ordinary savers on a wild ride.
According to The Economic Times, December 29, 2025, saw spot gold prices slide by 1.9 percent to $4,448.23 an ounce, a notable drop after hitting a record high of $4,549.71 just three days earlier. U.S. gold futures for February delivery mirrored this decline, also falling 1.9 percent to $4,467.90. This pullback, analysts say, was driven primarily by traders cashing in on profits after a year of extraordinary gains. "This morning’s (gold) price decline, which follows record highs, is attributable mainly to traders taking profits ahead of the year-end," explained Ricardo Evangelista, an analyst at ActivTrades.
But even with this late-December dip, gold’s performance in 2025 has been nothing short of remarkable. Over the course of the year, the precious metal soared by roughly 72 percent, a rally fueled by a combination of softer U.S. monetary policy, a weakening dollar, persistent geopolitical tensions, and robust central bank purchases. The anticipation of further interest rate cuts in 2026, with traders pricing in at least two, has only added to the bullish sentiment surrounding non-yielding assets like gold.
Central banks have played a pivotal role in this story. As FXStreet highlighted, central banks worldwide added 1,136 tonnes of gold—worth an estimated $70 billion—to their reserves in 2022, the highest yearly purchase ever recorded by the World Gold Council. Emerging economies such as China, India, and Turkey have been especially aggressive, seeking to shore up their currencies and diversify reserves in the face of global uncertainty.
Yet, gold’s trajectory hasn’t been uniform across all markets. In India, for instance, the year-end brought a mix of highs and sudden reversals. As reported by The Times of India and Live Mint, gold prices in India hovered near $4,500 on COMEX and registered a record high of ₹140,000 per 10 grams following a breakout from the ₹135,000 level the previous week. However, December 29 saw a quick reversal, with MCX 24 karat gold opening at ₹1,40,228 per 10 grams—a marginal 0.25 percent rise—before dipping more than 1 percent to ₹1,38,438 by early afternoon.
This downtrend echoed across major Indian cities. In Mumbai, the 24 karat gold price fell to ₹1,38,550 per 10 grams, down ₹1,500 from the previous day, while Delhi and Kolkata saw similar declines. The only notable exception was Hyderabad, where 24 karat gold actually rose by ₹1,410, bucking the national trend. The broader technical outlook, however, remains optimistic. Manav Modi, Senior Analyst at Motilal Oswal Financial Services Ltd., suggested, "Gold prices may retest the recent support zone of ₹137,000 and ₹138,000, and dips should be utilized to accumulate gold." He recommended a buy-on-dips strategy, with potential targets of ₹143,000 to ₹145,000 per 10 grams should prices decisively break above ₹140,000.
Silver, too, has enjoyed upward momentum, supported by tight supply conditions, robust industrial demand, and ongoing market uncertainties. While gold’s moves have been dramatic, silver’s rise has quietly underscored the broader appetite for precious metals in turbulent times.
Meanwhile, in Iran, currency woes have added another layer of complexity to the gold market. According to Iran International and Eghtesad News, the open-market dollar exchange rate in Iran neared 144,000 tomans per USD on December 28, 2025, triggering a surge in local gold prices. The price of the Emami gold coin reached 169 million tomans, implying about $1,174 at the prevailing exchange rate. This sharp increase was largely driven by the weakening rial and a rush for safe-haven assets, a pattern familiar to many countries facing currency instability. As Meyka AI PTY LTD noted, "The rial exchange rate has become the key driver of Iran gold price and gold coin prices, reinforcing a local premium during stress."
It's worth noting that while Iran’s local gold prices are heavily influenced by the exchange rate and local demand, they don’t set the tone for global bullion markets. Still, these FX-driven moves can feed into broader regional sentiment, especially during Asian trading hours, and serve as a barometer for economic anxiety. For U.S. investors, the message remains clear: global gold price movements are still most sensitive to the U.S. dollar index, Treasury yields, and liquidity conditions.
Elsewhere in Asia, the Philippines experienced a more modest decline. FXStreet reported that on December 29, 2025, gold prices fell to 8,544.30 Philippine Pesos (PHP) per gram from 8,573.07 PHP per gram just three days earlier. Prices per tola and per ounce also dropped slightly. These local rates are calculated by adapting international prices to the USD/PHP exchange rate, illustrating once again how global trends ripple through to national markets. Gold’s role as a hedge against inflation and currency depreciation remains as vital as ever, especially for households and central banks seeking stability in uncertain times.
Driving much of this volatility are expectations around U.S. economic policy. Recent data indicated easing inflation and softer labor market conditions, bolstering hopes for multiple rate cuts in 2026. Even so, U.S. GDP growth surprised on the upside, adding a twist to the narrative. Investors and analysts are now closely watching the Federal Reserve’s December meeting minutes, set for release on December 31, for further clues about the interest rate outlook. As The Economic Times pointed out, non-yielding assets like gold tend to shine brightest when interest rates are low, as the opportunity cost of holding them diminishes.
Geopolitical developments have also played a part. U.S. President Donald Trump’s December 28 statement that he and Ukrainian President Volodymyr Zelenskiy were "getting a lot closer, maybe very close" to an agreement to end the war in Ukraine injected a dose of optimism into global markets. While such headlines can prompt short-term swings in gold as a safe-haven asset, the underlying drivers—currency trends, central bank activity, and economic policy—remain firmly in place.
For traders and investors navigating these choppy waters, caution is the order of the day. Meyka AI PTY LTD advised, "Keep position sizes modest into thin holiday trade. Use stops and avoid chasing gaps." With the year drawing to a close and liquidity thinning out, many are opting to wait for clearer signals before making big moves.
As 2025 gives way to a new year, gold’s story is far from over. Whether as a store of value, a hedge against inflation, or a speculative play on global uncertainty, the yellow metal continues to reflect the hopes, fears, and strategies of investors worldwide. The coming weeks—with key economic data, central bank insights, and persistent geopolitical risks—promise to keep gold firmly in the spotlight.
