Emre Yumlu 
Gold prices entered 2026 on a volatile note after a sharp decline at the end of 2025. The metal lost more than 4% in the final trading days of the year before finding renewed support as markets reopened and trading conditions normalized. Despite mixed drivers, gold (XAU/USD) managed to post a weekly gain amid broader macroeconomic and geopolitical developments.
Gold Year-End Selloff and Early Rebound
During the holiday period, thin liquidity and profit-taking pushed gold prices lower, as traders stepped back from risk ahead of year-end. Once market activity resumed, demand for safe-haven assets drove gold higher, with prices rising over 2.5% early in the first trading week of 2026.
Geopolitical tensions also contributed to the rebound. Reports of heightened U.S. involvement in Venezuela, including the capture of President Nicolás Maduro, increased perceptions of risk, leading investors toward traditional safe havens like gold.
U.S. Economic Data and Dollar Pressure
Midweek, U.S. macroeconomic data produced a mixed picture for markets. Private-sector employment figures and Purchasing Managers’ Index (PMI) data showed moderate improvement, reinforcing expectations that the Federal Reserve may hold policy steady in January. This dynamic briefly tempered gold’s upside by strengthening the U.S. dollar.
The dollar’s resilience, coupled with margin increases on gold and silver futures by the CME Group, capped further gains and pushed prices into a consolidation phase ahead of major data releases.
Silver Moves and Gold/Silver Ratio Dynamics
Silver (XAG/USD) experienced early-week strength following export control announcements from China, where a large share of the world’s refined silver supply is concentrated. Though a corrective move followed, silver’s sharp rise relative to gold caused the gold/silver ratio to decline by nearly 4% for the week — near its lowest levels since 2013.
Focus Shifts to U.S. Inflation and Geopolitics
Looking ahead, key U.S. inflation data, including the December Consumer Price Index (CPI), is set to influence gold’s short-term direction. A surprise upside in core inflation could bolster the dollar and weigh on gold, while softer prints could relieve pressure and support upside momentum.
Geopolitical headlines will also remain in focus. Ongoing discussions around Greenland and tensions in the Middle East, including unrest in Iran and potential U.S. involvement, could reinforce gold’s status as a safe-haven asset if risk perceptions intensify.
Data and Uncertainty to Drive Near-Term Action
The evolving landscape — driven by macro data and geopolitical developments — suggests gold will remain sensitive to headline risk and economic releases in the near term. While prices have stabilized from year-end lows, the interplay between central bank policy expectations, inflation metrics, and global tensions will likely shape gold’s performance in early 2026.
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