SINGAPORE / HONG KONG, 25 November 2025 – Gold prices remained largely steady on Monday as investors balanced rising expectations of a Federal Reserve (Fed) interest-rate cut with persistent strength in the U.S. dollar and hopes for progress in peace talks between Ukraine and Russia.
Spot gold was trading around US$4,065.31 per ounce, while U.S. gold futures for December slipped slightly. The strongest tailwind for gold came from speculation that the Fed could cut rates as early as December, with the probability rising to 72% from around 40% last Friday, according to the CME FedWatch tool.
Key Drivers at Play
Rate-cut expectations
Gold traditionally benefits when interest rates fall, as its opportunity cost (the yield lost by holding non-yielding bullion) decreases. Comments from New York Fed President John Williams indicating possible room for rate cuts bolstered optimism.
U.S. dollar strength
Despite expectations of looser policy, the U.S. dollar remained near six-month highs, making gold more expensive for international buyers and constraining upside.
Geopolitical and inflation flutter
The potential for a Ukraine-Russia peace deal has injected complexity: a deal could reduce geopolitical risk (weakening gold’s safe-haven appeal) but also shift global growth/inflation dynamics.
Implications for Asia-Pacific Investors
- Safe-haven positioning still valid: For Malaysian and regional investors, gold remains a hedge against macro risks (inflation, currency weakness, geopolitical shocks).
- Link to interest-rates & FX: As a non-yielding asset, gold’s performance is partly tied to interest-rates and the USD. A regional weaker ringgit or other widening yields may renew interest.
- Geopolitical sensitivity: Should progress in Ukraine-Russia talks improve confidence globally, gold might face selling pressure. Conversely, any escalation would likely push bullion higher.
- Portfolio diversification: Given the mixed drivers, gold may serve well as part of a balanced portfolio rather than a directional bet.
Risks & Watch-Points
- Delayed rate cuts: If the Fed backs away from cutting rates or signals further hikes, gold could weaken.
- Dollar reversal: A surge in the U.S. dollar or yields could hurt gold’s price, particularly for non-USD buyers.
- Geopolitical disappointment: If peace talks stall or conflict flares, gold may benefit, but uncertainty and volatility also pose issues.
- Regional demand: Asian central bank purchases and retail demand matter; any slowdown in these could reduce a key bid for gold.
