Gold prices continued to rise, hitting a more than one-week high! Strong demand provided support, but experts warned that stock market volatility could be a hidden concern.
2025-11-25 11:10:48
On Tuesday (November 25) in early Asian trading, spot gold continued its overnight gains, hitting a more than one-week high of $4,155.70 per ounce. Rising market expectations for a December rate cut by the Federal Reserve provided upward momentum for gold prices.
In her latest report, Suki Cooper, Global Head of Commodities Research at Standard Chartered Bank, provided an in-depth analysis of gold's performance. She believes that although gold prices have retreated from historical highs, strong investment demand is acting as a robust shield, significantly limiting downside risks. However, further volatility in the stock market and uncertainty surrounding Federal Reserve policy are also casting a shadow over gold's prospects.
The gold market is currently testing resistance near $4,150 per ounce, supported by persistently strong investment demand that is keeping prices high and preventing a sharp decline. In contrast, while gold prices have fallen by about 6% from their all-time high of around $4,360 per ounce last month, this pullback has been relatively mild and has not triggered panic selling.
In his report, Cooper emphasized that this high level of trading was not accidental, but rather the result of the combined effects of multiple forces. However, investors should be wary of interference from external factors.
Despite gold showing relative stability, Cooper clearly pointed out that precious metals could still face downward pressure if the stock market continues to be volatile.
She specifically mentioned that in an environment where tech stocks are leading the decline, gold will not automatically benefit from the pressure on the stock market; on the contrary, it may be affected. Specifically, if the stock market continues to be sluggish, it may trigger a chain reaction of margin calls in the short term. This pressure, like dominoes, will directly transmit to the gold market.
Cooper's analysis is based on a deep understanding of the global financial ecosystem. She argues that gold's safe-haven properties are not foolproof in certain scenarios, especially when investors are forced to liquidate assets to cover losses in other markets, where gold's liquidity advantage may turn into a disadvantage. This reminds us that in an era of diversified asset allocation, gold's price movements are increasingly intertwined with the stock market and cryptocurrencies, and drastic changes in any of these areas could amplify risks.
Another key factor limiting further gold price increases is the growing market uncertainty regarding the Federal Reserve's monetary policy outlook. Cooper explained that this uncertainty makes it difficult for gold to gather new upward momentum, as investors await clearer signals. Standard Chartered's forecasts indicate that the Fed is likely to keep interest rates unchanged at its meeting next month, contrasting with the easing policies expected by some in the market. She cited the Fed meeting minutes, pointing out that the minutes revealed an extremely cautious, even strongly reluctant, attitude towards rate cuts.
Furthermore, the postponement of the November jobs data release until after the meeting further exacerbated market uncertainty. Cooper's viewpoint is particularly sharp here; she believes that this policy delay not only amplifies short-term volatility but may also cause gold to stagnate in the absence of new catalysts. Overall, the Fed's conservative stance acts as an invisible wall, blocking any potential rebound in gold prices.
Despite increased downside risks, Cooper repeatedly emphasized that gold's downside potential is actually significantly limited, primarily due to strong and broad-based investment demand. Looking back at October, gold's record highs were mainly driven by unprecedented inflows into gold-backed exchange-traded funds (ETPs), acting as a "super engine" for the gold market. While the pace of ETP inflows has slowed recently, the physical market has far exceeded expectations—the weakness has been far less pronounced than anticipated against the backdrop of record prices. This suggests that investor enthusiasm for gold has not waned, but rather has shifted towards more stable holding strategies.
Cooper's report details the diversity of this demand, which extends beyond retail investors to include institutional investors, providing multi-layered support for gold and ensuring it doesn't easily collapse during periods of volatility.
Cooper further pointed out that the ranks of gold investors are steadily expanding, indicating solid potential for future demand and potentially becoming a new growth driver for the gold market. Looking back, she noted that after the global pandemic eased in the second quarter of 2021, established gold holders began gradually reducing their positions, making ETP fund flows more flexible and responsive. In the current market, established ETP holders, including pension funds, continued to increase their gold holdings in the third quarter of 2025, although their positions have not yet reached peak levels. More notably, the "investment advisor" category, which includes some family offices, saw continued growth in the third quarter. While the resilience of these new funds has not yet been fully tested by the market, according to market rumors, many new investors are still under-allocated relative to their target allocations, meaning there is still significant room for further increases.
Cooper's analysis here reveals optimism, arguing that this diversification of investor structure not only enhances market depth but also injects long-term vitality into gold.
Trading data also reflects a steady increase in investor acceptance of gold prices above $4,000 per ounce, further strengthening the foundation for gold's stability. Cooper specifically noted that in the last two weeks of October, short positions in the largest gold ETPs plummeted by 36% from mid-October, falling to their lowest level since February. As prices retreated from record highs, short sellers opted to take profits, indicating that market participants are increasingly accepting of gold prices consolidating within the recent range, rather than chasing extreme volatility. Furthermore, while one-month implied volatility remains volatile, it has fallen from recent highs and remains relatively stable, approaching April levels. Meanwhile, the one-month risk reversal indicator has fallen from its highest level since June but still clearly favors call options, suggesting that overall market sentiment remains optimistic. These observations by Cooper paint a picture of maturing investor psychology, with high gold prices gradually becoming the new normal.
In conclusion, the gold market's struggle around the $4,100 mark demonstrated strong investment demand as its core support, effectively limiting downside risks. While stock market volatility and the Federal Reserve's cautious policy stance introduced some uncertainty, the expansion of the investor base and increased market adaptability provided sustained momentum for gold. Cooper's in-depth analysis reminds us that in a complex global environment, gold remains one of the most reliable safe-haven options.
(Spot gold daily chart, source: FX678)
At 11:08 Beijing time, spot gold was trading at $4,148.75 per ounce.
In her latest report, Suki Cooper, Global Head of Commodities Research at Standard Chartered Bank, provided an in-depth analysis of gold's performance. She believes that although gold prices have retreated from historical highs, strong investment demand is acting as a robust shield, significantly limiting downside risks. However, further volatility in the stock market and uncertainty surrounding Federal Reserve policy are also casting a shadow over gold's prospects.
Current state of the gold market
The gold market is currently testing resistance near $4,150 per ounce, supported by persistently strong investment demand that is keeping prices high and preventing a sharp decline. In contrast, while gold prices have fallen by about 6% from their all-time high of around $4,360 per ounce last month, this pullback has been relatively mild and has not triggered panic selling.
In his report, Cooper emphasized that this high level of trading was not accidental, but rather the result of the combined effects of multiple forces. However, investors should be wary of interference from external factors.
Potential downside risks: the ripple effects on the stock market
Despite gold showing relative stability, Cooper clearly pointed out that precious metals could still face downward pressure if the stock market continues to be volatile.
She specifically mentioned that in an environment where tech stocks are leading the decline, gold will not automatically benefit from the pressure on the stock market; on the contrary, it may be affected. Specifically, if the stock market continues to be sluggish, it may trigger a chain reaction of margin calls in the short term. This pressure, like dominoes, will directly transmit to the gold market.
Cooper's analysis is based on a deep understanding of the global financial ecosystem. She argues that gold's safe-haven properties are not foolproof in certain scenarios, especially when investors are forced to liquidate assets to cover losses in other markets, where gold's liquidity advantage may turn into a disadvantage. This reminds us that in an era of diversified asset allocation, gold's price movements are increasingly intertwined with the stock market and cryptocurrencies, and drastic changes in any of these areas could amplify risks.
Federal Reserve policy uncertainty hinders gold's upward momentum.
Another key factor limiting further gold price increases is the growing market uncertainty regarding the Federal Reserve's monetary policy outlook. Cooper explained that this uncertainty makes it difficult for gold to gather new upward momentum, as investors await clearer signals. Standard Chartered's forecasts indicate that the Fed is likely to keep interest rates unchanged at its meeting next month, contrasting with the easing policies expected by some in the market. She cited the Fed meeting minutes, pointing out that the minutes revealed an extremely cautious, even strongly reluctant, attitude towards rate cuts.
Furthermore, the postponement of the November jobs data release until after the meeting further exacerbated market uncertainty. Cooper's viewpoint is particularly sharp here; she believes that this policy delay not only amplifies short-term volatility but may also cause gold to stagnate in the absence of new catalysts. Overall, the Fed's conservative stance acts as an invisible wall, blocking any potential rebound in gold prices.
Strong investment demand: a solid floor for downside potential
Despite increased downside risks, Cooper repeatedly emphasized that gold's downside potential is actually significantly limited, primarily due to strong and broad-based investment demand. Looking back at October, gold's record highs were mainly driven by unprecedented inflows into gold-backed exchange-traded funds (ETPs), acting as a "super engine" for the gold market. While the pace of ETP inflows has slowed recently, the physical market has far exceeded expectations—the weakness has been far less pronounced than anticipated against the backdrop of record prices. This suggests that investor enthusiasm for gold has not waned, but rather has shifted towards more stable holding strategies.
Cooper's report details the diversity of this demand, which extends beyond retail investors to include institutional investors, providing multi-layered support for gold and ensuring it doesn't easily collapse during periods of volatility.
Expanding investor base: a new engine for future demand potential
Cooper further pointed out that the ranks of gold investors are steadily expanding, indicating solid potential for future demand and potentially becoming a new growth driver for the gold market. Looking back, she noted that after the global pandemic eased in the second quarter of 2021, established gold holders began gradually reducing their positions, making ETP fund flows more flexible and responsive. In the current market, established ETP holders, including pension funds, continued to increase their gold holdings in the third quarter of 2025, although their positions have not yet reached peak levels. More notably, the "investment advisor" category, which includes some family offices, saw continued growth in the third quarter. While the resilience of these new funds has not yet been fully tested by the market, according to market rumors, many new investors are still under-allocated relative to their target allocations, meaning there is still significant room for further increases.
Cooper's analysis here reveals optimism, arguing that this diversification of investor structure not only enhances market depth but also injects long-term vitality into gold.
Improved Market Adaptability: The New Normal Under High Gold Prices
Trading data also reflects a steady increase in investor acceptance of gold prices above $4,000 per ounce, further strengthening the foundation for gold's stability. Cooper specifically noted that in the last two weeks of October, short positions in the largest gold ETPs plummeted by 36% from mid-October, falling to their lowest level since February. As prices retreated from record highs, short sellers opted to take profits, indicating that market participants are increasingly accepting of gold prices consolidating within the recent range, rather than chasing extreme volatility. Furthermore, while one-month implied volatility remains volatile, it has fallen from recent highs and remains relatively stable, approaching April levels. Meanwhile, the one-month risk reversal indicator has fallen from its highest level since June but still clearly favors call options, suggesting that overall market sentiment remains optimistic. These observations by Cooper paint a picture of maturing investor psychology, with high gold prices gradually becoming the new normal.
In conclusion, the gold market's struggle around the $4,100 mark demonstrated strong investment demand as its core support, effectively limiting downside risks. While stock market volatility and the Federal Reserve's cautious policy stance introduced some uncertainty, the expansion of the investor base and increased market adaptability provided sustained momentum for gold. Cooper's in-depth analysis reminds us that in a complex global environment, gold remains one of the most reliable safe-haven options.
(Spot gold daily chart, source: FX678)
At 11:08 Beijing time, spot gold was trading at $4,148.75 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
