Gold futures staged a powerful rally on Monday, gaining $112 (+2.79%) to trade at $4,120.20 per troy ounce, suggesting the precious metal may have completed a two-week consolidation period and could resume its historic advance through year-end.
The December contract reached an all-time high of $4,374 on October 20 before initiating a sharp correction. The following session saw gold plunge $235, marking the beginning of a defined pullback that would test the resolve of bullish traders. By October 28, prices had retreated to an intraday low of $3,901.90—a decline of roughly $472 from the record peak.
Technical analysis reveals that most candlestick real bodies found support just below the critical 61.8% Fibonacci retracement level at $3,953. This retracement, calculated from the September 18 low through the October 20 high, proved significant as prices required seven trading days to reach these levels and remained range-bound for an additional seven sessions before today's breakout.
Monday's surge appears driven by two primary catalysts. First, market participants are increasingly confident the Federal Reserve will implement another interest rate cut in December, which historically supports gold prices by reducing the opportunity cost of holding non-yielding assets. Second, cautious optimism has emerged regarding a potential resolution to the ongoing government shutdown, the longest in history. Currently there are expectations that Congress may reach an agreement within the next one to two weeks.
The recent pullback, while unnerving to some investors, represents a natural and healthy correction following gold's extraordinary $1,000+ advance since mid-August. Market analysts have widely characterized this consolidation as a temporary pause rather than a trend reversal, with the fundamental drivers that propelled gold to record territories remaining firmly intact.
The precious metal's trajectory this year has been nothing short of remarkable. Gold’s performance has been fueled by persistent inflation concerns, central bank buying, and anticipation of monetary policy easing. These factors have combined have created one of the strongest bull markets in gold's modern history.
Looking ahead, influential analysts across the precious metals sector maintain a decisively bullish outlook through year-end and into 2026. The consensus suggests that if current market sentiment holds—supported by the fundamental factors that drove this year's historic rally—gold could challenge or exceed the records established in recent weeks.
The critical question facing traders now is whether today's breakout represents the resumption of the primary uptrend or merely a temporary bounce within the consolidation range. However, given the strength of today's advance and supportive macroeconomic backdrop, the technical setup increasingly favors further gains in the final weeks of 2025.
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