Here's how to trade Gold on January 02; Check support, target and more

Gold: Margin hikes and index rebalancing in focus

Performance

On the last day of the year 2025, spot gold moved between $4275 and $4373; it closed nearly 0.5 per cent lower at $4319. However, the metal finished the year 2025 with an outsized gain of 65 per cent, which makes 2025 to be the best year since 1979 in which it rallied 127 per cent. 

Spot gold surged to a fresh record high of $4549 on December 26 before giving back some of its gains on margin hikes and profit booking.

Geopolitics watch

The Trump Administration, to step up pressure on Venezuela's oil exports and signalling China to stary out of the US-Venezuela standoff, sanctioned Chinese companies based in Hong Kong and mainland China for evading restrictions on Venezuela's oil exports. The Administration also banned four oil vessels. China, Venezuela's biggest oil customer, called the US quarantine on Venezuelan as unilateral bullying.  ALSO READ | Gold price climbs ₹10 to ₹1,35,070, silver price falls ₹100 to ₹2,37,900

 

ETF holdings and COMEX inventory

Total known global gold ETF holdings stood at 98.95 as of December 31, which translates into an increase of 19.43 per cent YTD. It amounts to a huge net inflow of 501 tons, first year of net inflow following 4 straight years of outflows.

Registered COMEX gold inventory stood a 19.36 MOz, up around 8 per cent from near a one-year low of 17.86 MOz noted on December 4. Inventories are down 4.89 per cent from the record high of 24.25 Moz reached on April 7 this year.

Margin hikes

 

Parabolic moves in the silver and PGM metals prompted the CME to hike margins on gold and silver the second time in a week. 

Margins have been hiked on platinum, platinum and gold also.

  Shanghai Gold Exchange increased silver margin to 20 per cent.

  There could be further hikes in margins.  

Upcoming data 

Major US data on tap include ISM manufacturing (January 5), ADP employment change (January 7), ISM services (January 7), JOLTs job openings (January 7) and Unit labour costs (January 8). China's RatingDoG services and composite PMIs will be out on December 5. 

Major Eurozone data in focus include services and composite PMIs (January 6), CPI (January 7) and PPI (January 8).

Data and event roundup

 

FOMC minutes for the December 10 Fed meeting showed that most of the members are inclined towards cutting rates further if inflation comes down. 

US Pending home sales (November) at 3.3 per cent toped the estimate of 0.9 per cent US housing prices Index surged to a new record high.

  Weekly job data showed that initial jobless claims fell to 199K from 215K in the week ending December 27. Continuing claims slipped below 1900K.

  China's NBS manufacturing and non-manufacturing unexpectedly moved back into expansion zone in December.

  The Bank of Japan's summary of opinions of December 19 meeting showed that the Bank is expected to hike rates further in 2026 as real interest rates remain very low.

Dollar Index and yields

 

The US Dollar Index recorded the sharpest annual decline since 2017 as it slumped 9.36 per cent in 2025. The US Dollar is losing its appeal on dovish Fed outlook as investors hold the view that the Central Bank is set to cut rates more than 2 times this year. 

Investors are closely monitoring the Fed Chair Powell's probable replacement with National Economic Advisor Hassett, governors Waller and Bowman and BlackRock's Risk Reider in the fray.

  The Dollar Index closed with gain of 0.1 per cent at 98.32 on December 31, highest since December 19, as US yields hardened.

  10-year yields rose more than 1 per cent to 4.17 per cent, while 2-year yields at 3.47 per cent were up nearly 3 bps.

  The year 2025 was a strong year for the bonds as 2-year yields tumbled 18 per cent (77 bps) in 2025, while 10-year yields slumped around 9 per cent; thus, bull steepening the yield curve as the Fed cut rates into elevated inflation even as the US economy continues to do well.

LBMA inventory update 

The LBMA will publish its next warehouse update on January 8.

Index rebalancing

 

Five-day rebalancing of commodities Index managed by Bloomberg and S&P Global will begin on January 8, wherein passive funds will likely sell outperforming assets like silver, gold and copper and buy underperforming commodities to match the new weights assigned by both the Bloomberg Commodity Index and the S&P GSCI. Per Bloomberg estimates, around $120 billion is pegged to each Index, based on cash flowing from pension funds, and broader investment portfolios.

Gold Outlook

 

Margin hikes by the CME has cooled down the speculative frenzy in metals to a great extent.

  Risk of further margin hikes and Index rebalancing dynamics may keep the metal on defensive in very short term as the US ISM data loom. However, downside is expected to be limited as fundamentals remain quite constructive. 

  Barring geopolitical shocks, spot gold may trade with a slightly bearish tilt ahead of the US ISM data and Index rebalancing. January is usually a strong month for the metal though, which also may limit the downside.

  Support is at $4250/$4175. Resistance is at $4405/ $4435/$4550.    (Disclaimer: Praveen Singh is head of currencies and commodities at Mirae Asset Sharekhan. Views expressed are his own.)