JOHANNESBURG (miningweekly.com) – Even though there is consensus that gold has probably already hit its 2025 high point and is unlikely to go beyond the all-time record it set in October when it breached the $4 300/oz mark, a Santa gold rally during the Christmas period and into year-end should not be ruled out.

Also, while the incomplete reopening of US administration is encouraging, the Commodity Futures Trading Commission (CFTC) needs to return with key risk-assessment data required by the Federal Reserve as all eyes focus on December 10 when a further interest rate change could have implications for gold.

Moreover, the indication of the US Supreme Court that tariff implementation is probably beyond executive office scope could also impact.

These and several more points are made by World Gold Council senior market strategists John Reade and Joseph Cavatoni in their latest episode on gold market developments, gold price movements, the impact of political events in Washington, and year-end gold predictions.

The World Gold Council’s latest GoldHub also provides an update on China’s gold market, where stability and growth are prevalent, and on India’s peak Diwali and Dhanteras peak gold-buying occasions.

Regarding China, World Gold Council research head in China Ray Jia reports that gold capped further gains in October, with wholesale gold demand defying seasonal patterns, rising to 124 t.

Chinese gold exchange trade funds (ETFs) added 34 t worth at $4.5-billion last month, and gold futures volumes surged at the Shanghai Futures Exchange.

The People’s Bank of China, which has reported gold purchases 12 months in a row, added 0.9 t in October, lifting the total to 2 304 t, 8% of China’s foreign exchange reserves and 24 t higher than at the end of 2024.

Looking ahead, the recent Chinese gold market value-added tax (VAT) change is likely to put pressure on local gold jewellery demand as the sector is impacted by additional tax. But consumer sensitivity to price may also be lessening as the gold price has been rising steadily for more than three years now.

The VAT change does not apply to gold bars sold by Shanghai Gold Exchange members, gold ETFs or gold accumulation plans, and there may be further room for growth in gold bar sales, as consumers may purchase them for jewellery making purposes, Jia adds.

World Gold Council’s Reade and Cavatoni also analyse the sentiment from the London Bullion Market Association (LBMA) and London Platinum and Palladium Market Global Precious Metals Conference 2025 in Kyoto and the implications of upcoming economic data on gold prices, amid gold calming down from its $4 300/oz October breaching and correcting below $4 000/oz.

“Gold now seems to have stabilised broadly around the $4 000/oz level,” said Reade, based on conversations with participants at the LBMA conference in Kyoto, for example.

“I think that seems to be the consensus that we've probably seen the highs of the year.

Based on conversations on the US side, Cavatoni agreed and spoke of the US sentiment being the same – “pretty calm, pretty much interested in looking forward at the gold price and understanding that the short-term volatility is something to expect."

Reade: I was speaking to a couple of hedge fund managers that I chat to from time to time - they expect the same. They think most of the work has been done in gold this year, but don't rule out a bit of a Santa rally into Christmas and into the end of the year, as fund managers want to establish positions that they can have for 2026 and also show their chief investment officers that, yes, they're the gold guy, and they are long gold. Never does any harm with that. Now, Santa rallying is something that comes through in equity markets, particularly in the US sometimes, so into the holiday season and perhaps into the end of the year, you can sometimes see equities reasonably strong, maybe in lowish volumes, but reasonably strong. That often happens in gold as well, but that's only some of the factors that are likely to drive gold. We've seen some big developments take place in Washington over the last couple of weeks.

Cavatoni: There are two things for us to highlight. The first is that the Supreme Court's taken a look at what's playing out with the tariff discussion, and the signalling that they're giving to the market right now is that they believe that it's probably beyond the scope of what the executive office has to enforce. Now they haven't passed an opinion, and that could be days, weeks or months away, but that sentiment is already making its way into the market and actually impacting even assets like gold in terms of the outlook for those. This is a real question on whether these tariffs are legal or not, and in short, it looks like the administration is going to respond to whatever the outcome is, to ensure that they can leave the tariffs in place. So, all of these actions are just adding to the questions of risk and uncertainty, costs for a US investor, costs for US citizens to run their lives, and ultimately, kind of keeping things at a higher level.

Reade: But also, we've seen the US government looks like it's coming back to work. That should be a big impact based on what we're going to see in the next couple of weeks.

Cavatoni: That's right. So the US government has passed legislation on a bill to reopen. Now, putting it into context, this is going to get us to January 30 of next year. It's not a complete reopening, but it's a very encouraging move on the part of the administration and Congress to get us back to work and get us open, because we’re lacking a lot of key data and the Fed signalling more than ever before, don't forego any conclusions on what we're going to do. We're looking at that December 10 date to see if there's going to be a move on the part of a further rate cut, which could have a big implication for gold. But we're going to have to wait and see. The data has to come to them, and they have to make the decision.

Reade: I'm really looking forward to seeing positioning data from the CFTC, which will allow us to assess how long the market is and perhaps more importantly, what were the drivers of gold up to the high and then for the correction. We've been missing this data now for weeks. I'm hoping that the CFTC will get its act together, and we should start to get that coming out very soon, because it's a very important ingredient in assessing the short-term direction of the gold market.

Cavatoni: It’s really critical for us to see what's playing out and how the flows in gold are actually impacting the price. What do you think we should be keeping a close watch on for the next six weeks?

Reade: It is worth paying attention to some of the weaknesses beginning to turn up in the equity market. I'm hearing more doubts about AI capex and the outlook for that all important equity sector and obviously politics – your point about tariffs and the Supreme Court issuing its judgment.

Also covered in GoldHub is the gold demand, led by investment buying, being strengthened in India during the festive period, but softening thereafter.

Also in India, gold ETFs continued to have a strong momentum with record inflows and new investors in October, when gold imports soared despite the price rally.

Festive demand around Diwali and Dhanteras – India’s peak gold-buying occasions – was reportedly strong despite record-high prices, according to feedback from industry stakeholders.

Market participants consistently highlighted that the strength was driven primarily by investment-oriented buying, particularly bars and coins, with some noting volume nearly doubling from a year ago.

E-commerce platforms also saw solid sales, and digital gold purchases rose too.

Unified Payments Interface data shows digital gold purchases increasing 62% m/m to $259-million in October.

In tonnage terms, the volume rose 45% m/m to 1.8 t.

Jewellery sales also held up well during the festive period, with retailers reporting healthy sales across both single-store and large multi-store formats, the latter benefitting from brand trust and promotional initiatives.

Although jewellery volumes were softer owing to elevated prices, the overall value of sales remained healthy, reportedly up by around a quarter y/y for many, reflecting resilient festive buying sentiment.

Post-Diwali, feedback suggests market activity in November has been subdued, despite the onset of the wedding season, which extends to March.

Jewellery buying is largely wedding-driven, while investment demand persists. Supply of old gold into the market has reportedly moderated. Trade participants attribute this to consumers having exhausted surplus gold for immediate needs and now choosing to hold onto jewellery in expectation of further price gains.

October marked the sixth consecutive month of strong inflows into Indian gold ETFs, emphasising the growing appeal of gold as an investment asset in various forms.

Net inflows for the month were $876-million, a modest 8% decline from the previous month, largely in line with our estimates.

Despite this moderation, the figure remained significantly higher than the year-to-date average of $315-million.

The dip was primarily owing to a sharp rise in redemptions, which hit a record $244-million.

This surge in redemptions was likely driven by profit-taking following the rally in gold prices.

Gross inflows for the month, however, set a record at $11-billion. The exceptional rise in gold prices likely drew investor attention, contributing to the strong inflows, while ongoing safe-haven demand further reinforced this trend.