The last three trading days of 2025 have seen spot gold undergo consecutive adjustments from high levels, but this has not diminished its shine as a winner for the year. The data is impressive—an annual increase of over 64%, marking the best yearly performance in nearly 46 years. This year-end retreat is essentially a short-term emotional release, and the long-term upward logic remains solid.

Specifically, let's look at the three-day market rhythm. On December 29, gold experienced a sharp drop, opening at 4549.64 USD, reaching a historical second-high, then plunging straight down during the New York session. The daily decline was 4.47%, quickly breaking below the 4400 USD level, with a low of 4307.67 USD, and finally closing at 4330.31 USD. Profit-taking pressure was fully released, and bears temporarily gained the upper hand.

On December 30, the market entered a recovery phase, with bulls and bears fighting intensely. After rising to 4382.58 USD in the early session, it pulled back, ending with a slight increase of 0.17% at 4331.4 USD. The rebound was limited, and overall pressure remained.

On December 31, the final day continued to be under pressure, reaching a high of 4372.97 USD in the morning before declining steadily. In the afternoon, it broke below the psychological 4300 USD level, with a low of 4273.94 USD, closing down 0.5% at 4318.67 USD. Thus, the three-day correction marked the end of 2025.

Why did the year-end correction happen so suddenly? The core drivers are actually quite straightforward. First, nearly 70% of the year's gains prompted institutions to settle and lock in profits at year-end, triggering a chain reaction of large-scale selling; second, CME raised gold futures margin requirements, sharply increasing speculative costs, forcing funds to reduce positions and exit; third, liquidity shrank before New Year’s Day, amplifying small sell-offs, while the dollar rebounded and expectations of rate cuts cooled, weakening gold’s appeal; finally, geopolitical tensions eased temporarily, risk sentiment declined, and some funds shifted into risk assets.

But the key point here is that short-term adjustments cannot fundamentally change the long-term bullish pattern. From a technical perspective, the 4270-4300 USD range is a recent support zone; holding this level can stabilize and trigger a rebound. Even if broken, the 4200-4250 USD zone will form a strong support band. From a fundamental standpoint, the four core positives—Fed rate cut expectations, central banks continuing to buy gold, ongoing geopolitical risks, and continuous ETF inflows—are all intact. Institutions are generally bullish on 2026, and reaching the 5000 USD target is not a pipe dream. Conversely, this correction actually provides a great opportunity for savvy traders to accumulate at low levels.

From a trading perspective, here are some ideas. In the short term, consider lightly shorting within the 4350-4380 USD range, with a stop-loss at 4400 USD, and targets around 4280-4300 USD. If gold stabilizes between 4270-4300 USD, consider building long positions lightly. For medium to long-term strategies, once the price retraces to 4200-4250 USD, decisively scale into positions, targeting above 4500 USD, and hold steady, waiting for new highs.