Looking to the Futures
Gold Prices Hit New Highs
Gold prices surged to all-time highs as the dollar continues to see underlying weakness. The FOMC is expected to continue to cut rates through 2026 and take action to boost liquidity in the financial system. The euro traded higher yesterday with current outlook for the ECB to keep interest rates unchanged in 2026. The yen regained some of the losses last week after the +25 bp rate hike by the Bank of Japan. Central bank demand for gold has been supportive for prices. Also in the bull camp US tariffs and geopolitical risks have increased safe haven demand for gold.
The US dollar has seen downside pressure throughout the year, and it appears this may continue into 2026. The FOMC is expected to cut interest rates by -50 bp in 2026 with the CME FedWatch tool showing a 75% chance that rates are cut by at least -50 bp by the end of next year. Another bearish factor for the dollar is the Feds plan to purchase $40 billion a month in T-bills to boost liquidity in the financial system. This plan to maintain ample reserves in the banking system is expected to last for several months before tapering. President Trump is expected to announce his selection for the new Fed Chair in early 2026 and the dollar is being undercut on the expectation that the new Chairman will have a more dovish approach. According to Bloomberg, the National Economic Council Director Kevin Hassett is the most likely choice from President Trump.
The euro traded higher to start the week after ECB officials stated they are satisfied with the current outlook of no interest rate cuts. ECB Governing Council member Gediminas Simkus stated he is comfortable with the current level of interest rates and indicated economic growth has improved though remains sluggish. ECB Governing Council member Peter Kazimir also stated that he is confident in current interest rate levels but is ready to act if conditions change. Kazimir stated that risks remain from tariffs and the Russia-Ukraine war.
The yen saw some support on Monday following the +25 bp rate hike from the Bank of Japan. The 10-year JGB yield rose +4.9 bp to 2.021%, its highest level in over two years.
Gold prices have seen support from strong central bank demand with China's PBOC reserves rising +30,000 ounces to 74.1 million troy ounces in November. The World Gold Council has reported that global central banks purchased 220 MT of gold in Q3, a +28% rise from Q2.
Safe haven demand continues to provide support for precious metals. US tariffs continue to remain a concern on the global stage and geopolitical tensions in Ukraine, the Middle East, and Venezuela have led to an increase in demand for gold.
Technicals
Looking at the daily chart for Gold Futures February 2026 (/GCG26) contract we can see yesterday’s significant rally on average volume. The contract has continued to trade off the 20-Day Simple Moving Average over the past month and a half.
The Daily Technical Summary from Hightower Research shows support levels at 4342.7 and 4313.2 with resistance levels at 4395.3 and 4418.5. Both resistance levels were broken during yesterday’s session.
According to the CFTC Commitment of Traders report released December 9th, money traders have increased their long position by +3,240 contracts and increased their short position by +16 contracts. Managed money traders were net long 123,548 contracts as of the time the report was published.
The 14-Day Relative Strength Index at 75.40% indicates the contract has moved into overbought territory.
20-Day SMA 4,278.3
50-Day SMA 4,190.2
200-Day SMA 3,643.7
14-Day RSI 75.40%
Implied Volatility 19.55%
Contract Specifications
Economic Calendar
Capacity Utilization 9:15 AM ET
Consumer Confidence 10:00 AM ET
Durable Goods -ex transportation 8:30 AM ET
Durable Orders 8:30 AM ET
GDP Deflator-Adv. 8:30 AM ET
GDP-Adv. 8:30 AM ET
Industrial Production 9:15 AM ET
New Home Sales 10:00 AM ET
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