Gold Futures Forecast Report (December 2025)

1. Thesis

Given the combination of (i) a cooling US labor market, (ii) a strongly dovish shift in rate expectations, and (iii) persistent geopolitical tensions, the baseline forecast points to a gradual upward trend in gold futures over the next 12 months, with intermittent volatility around key macro data and Fed communications.

From a latest observed level of $4,243 per ounce (1 December 2025), the forecast path implies a rise to about $4,928 by December 2026—an increase of roughly 16% over the forecast horizon. This is consistent with an environment of easing policy, softer growth, and ongoing demand for safe-haven assets.

2. Current Market Context

The immediate backdrop for gold futures is characterized by a short-term pullback within an otherwise supportive macro regime:

• Price action: Gold has recently fallen to around $4,180 per ounce as investors took profits and lightened exposure ahead of the upcoming FOMC meeting. This suggests positioning is being tactically adjusted rather than a fundamental reassessment of gold’s role.

• Labor market data: The latest November ADP report showed an unexpected loss of 32,000 private-sector jobs, against expectations for a modest gain. This is the third decline in four months and marks the steepest hiring slowdown since 2023, reinforcing the narrative of a cooling labor market.

• Monetary policy expectations: Fed officials have signaled concern over slower job growth, and rate futures now price in nearly a 90% chance of a 25 bp cut next week. Lower expected policy rates—and, by extension, lower expected real yields—are historically supportive of gold.

• Geopolitics: US–Russia talks on the Ukraine war ended without progress, preserving a layer of geopolitical risk that underpins safe-haven demand.

Taken together, the short-term dip looks more like tactical profit-taking in front of a critical policy event than the start of a sustained downtrend, and is broadly consistent with the forecasted re-acceleration of prices in the months ahead.

3. Data and Forecast Snapshot

Indicator: Gold Futures
Current period: December 2025
Latest observation (1 Dec 2025): $4,243.1 per ounce
Frequency: Monthly
Forecast horizon: 12 months (to December 2026)

The forecast path embedded in the data is:

The trajectory is monotonic and moderately sloped upward:

• Near term (to January 2026): Sideways—the January forecast equals the latest observation, suggesting anticipated consolidation as markets digest the first rate cut and initial data response.

• Medium term (February–June 2026): Gradual appreciation, with gold rising into the mid-$4,600s.

• Late 2026: Continued gradual gains, reaching just under $4,930 by December.

The profile is indicative of a controlled, policy-driven reflation in gold, not a disorderly spike driven by crisis, but a steady repricing as real yields grind lower and risk premia remain elevated.

4. Drivers Consistent with the Upward Path

4.1 Monetary Policy and Real Yields

The single most important macro driver for the forecasted rise in gold is the shift toward easier US monetary policy:

• The 90% probability of a 25 bp cut next week is a strong signal that markets see the peak in rates as definitively behind us.

• A cooling labor market increases the likelihood that this will not be a one-off cut, but part of a broader easing cycle (or, at minimum, a prolonged hold at lower levels).

• Lower nominal rates, if not fully offset by falling inflation expectations, tend to pull real yields down—a key positive for non-yielding assets like gold.

The forecast’s steady, month-by-month rise in gold futures prices is consistent with an environment in which:

• The Fed is incrementally easing or guiding toward easier conditions.

• Real yields are trending lower or staying suppressed.

• The US dollar is not aggressively strengthening, allowing gold to appreciate in dollar terms.

4.2 Growth, Labor Market, and Risk Appetite

The labor data embedded in the market context points to late-cycle dynamics:

• Repeated job losses in ADP readings and the steepest hiring slowdown since 2023 suggest the US economy is well past its peak growth phase.

• Fed commentary emphasizing the need to address slower job growth points to rising concern about downside growth risks.

In such a scenario, investors typically:

• Rebalance away from pure cyclical risk (e.g., highly leveraged or growth-sensitive equity exposures).

• Increase allocations to diversifiers and hedges, including gold.

This slower-growth, easier-policy mix is classically supportive of a measured, sustained gold uptrend, which the forecast captures.

4.3 Geopolitical and Risk-Premium Considerations

The absence of progress in US–Russia talks on the Ukraine war implies:

• Persistent geopolitical risk premium in global markets.

• Ongoing demand for safe-haven assets, particularly in periods of risk-off sentiment.

While the forecast does not show an explosive jump typical of acute crisis, the smooth upward slope is consistent with chronic, not acute, geopolitical tension—a steady tailwind rather than a crisis spike.

5. Interpretation of the Forecast Path

Combining the fundamental backdrop with the numerical forecast, a coherent narrative emerges:

1. Short term (next 1–2 months):

   • Markets have already priced in a high likelihood of a rate cut.

   • Profit-taking and event risk (FOMC, key data like PCE) generate sideways to choppy trading, reflected in the flat January 2026 forecast at $4,243.1.

   • Decision makers should expect volatility around announcements, but not a structural break lower.

2. Medium term (3–6 months):

   • As the easing path becomes more credible and labor softness persists, real yields drift lower, and gold begins a steady appreciation into the mid-$4,000s.

   • This segment of the forecast suggests incremental repricing rather than panic buying.

3. 12‑month horizon (to December 2026):

   • Gold futures near $4,928 represent a gradual 16% increase over the starting point.

   • This is consistent with moderate, sustained support from monetary policy and risk premiums, not hyperinflation or severe systemic stress.

The core implication is that the market is pricing a durable but orderly revaluation of gold higher, in response to a structurally easier policy regime and a more fragile macro backdrop.

6. Implications for Decision Makers

6.1 Asset Allocators and Portfolio Managers

• The forecasted path suggests that strategic or core allocations to gold may continue to provide:

  • Diversification benefits against equity and credit risk.

  • Protection against policy error, renewed inflation, or growth disappointments.

• Tactical timing may be informed by the near-term consolidation implied in early 2026:

  • Periods of profit-taking and pre‑FOMC volatility may offer better entry points within an upward trend.

6.2 Corporates and Real-Economy Hedgers

• Companies with gold exposure on the cost or revenue side (miners, jewelers, industrial users) should:

  • Recognize that the baseline points to rising forward prices over the next year.

  • Consider staggered hedging strategies (e.g., layering in hedges over several months) to avoid committing entirely at current levels while still protecting against a projected move toward nearly $4,930.

6.3 Policy Makers and Central Banks

• The trajectory reinforces that easing cycles can re‑inflate gold prices, especially when accompanied by:

  • Evidence of labor market weakness.

  • Elevated but contained geopolitical risk.

• For central banks holding or considering gold as part of reserves:

  • The projected rise supports the case for gold as a portfolio stabilizer in an environment of shifting rate regimes and geopolitical fragmentation.

7. Key Risks to the Baseline

While the data imply a smooth upward path, several scenarios could challenge this thesis:

• Stronger-than-expected growth or labor rebound:
  A reacceleration in hiring or output could reduce the urgency for further easing, push real yields higher, and temper or reverse the expected climb in gold.

• More hawkish Fed than priced:
  If the Fed cuts less than expected, or signals a willingness to keep real rates elevated, gold could trade sideways or lower relative to this forecast.

• Geopolitical de-escalation:
  A credible, lasting easing of tensions in Ukraine or other flashpoints could compress the risk premium embedded in gold.

• US dollar strength:
  A sharp dollar rally—perhaps due to relatively stronger US performance—could cap gold’s gains in dollar terms, even if local-currency demand remains robust.

Decision makers should treat the provided projection as a central case, with these risks defining plausible upside and downside deviations.

8. Visualization

This visualization can be used to inspect the shape of the forecast path, identify inflection points, and compare projected levels with historical ranges and volatility.

9. Disclaimer

All forward-looking statements and forecasts are inherently uncertain and subject to change with new information. Nothing in this report should be construed as investment, legal, tax, or other professional advice, nor as a recommendation to buy, sell, or hold any financial instrument. Investors and other decision makers should conduct their own analysis and, where appropriate, consult a qualified financial advisor before making any decisions.