Gold entered a consolidation phase after a rally earlier in the week. The metal had gained bullish momentum as normal trading conditions resumed. This followed a loss of over 4% in the final week of 2025, a move attributed to profit-taking during thin holiday volumes.
The Gold/Silver ratio fell to its lowest level since August 2013, dropping nearly 4% for the week. This decline was driven by a sharp rise in silver prices. Silver gained more than 10% in two days after China announced new export controls on the metal. China controls a large portion of the world’s refined silver supply.
Recent US economic data presented a mixed picture. The ADP report showed private sector employment increased by 41,000 in December. The ISM Services PMI also improved. However, official Nonfarm Payrolls rose by 50,000, slightly below expectations. The unemployment rate fell to 4.4%. These figures reinforced expectations the Federal Reserve would hold policy steady, limiting gold’s movement.
Short-term price direction may be influenced by upcoming US inflation data and geopolitics. December’s Consumer Price Index is key. A monthly core reading of 0.3% or higher could boost the US dollar by reviving inflation concerns. A reading below 0.2% could support gold.
Geopolitical tensions are also in focus. US Secretary of State Marco Rubio plans meetings regarding Greenland. President Donald Trump reiterated interest in acquiring the territory. An escalation in US-EU tensions over this could drive investors toward safe-haven assets like gold.
Unrest in Iran adds another layer of risk. President Trump stated the US could take military action if Iranian authorities use lethal force against protestors. A deepening conflict involving the US could see gold continue to benefit from safe-haven demand.
