Gold prices stabilized after three consecutive days of gains, supported by market expectations of further monetary easing from the U.S. following the Federal Reserve's rate cut this week. Meanwhile, silver prices hovered near record highs.

Spot gold held steady around $4,285 per ounce, poised for a weekly gain exceeding 2%. After policymakers announced a benchmark rate cut on Wednesday, the Fed left room for additional reductions next year. While officials signaled only one potential rate cut in 2026, swap traders are betting on two.

Lower interest rates benefit non-yielding precious metals. Further support came as the Fed prepares to purchase $40 billion in short-term Treasury bills monthly starting Friday to replenish financial system reserves.

Gold has surged over 60% this year, while silver has more than doubled—both metals are on track for their best annual performance since 1979. Central banks' aggressive gold purchases and investors fleeing sovereign bonds and forex markets have fueled the rally.

"Gold's structural uptrend has room to run," said Wu Dilin, research strategist at Pepperstone Group. "An unexpected CPI uptick in December or January might trigger a short-term pullback, but the medium-term bullish trend should hold as long as the Fed stays dovish."

World Gold Council data shows gold ETF holdings grew every month this year except May. Meanwhile, silver hit a record $64.3120/oz on Thursday amid surging demand, tight supply at major trading hubs, and market dislocations.

"Strong central bank buying, renewed gold ETF inflows, accommodative policies, and persistent geopolitical tensions will sustain macro support for gold," noted Chen Xibo, senior analyst at Vantage Markets Melbourne. "The rally could extend into 2026."

Spot gold rose 0.1% to $4,285.66/oz, while silver gained 0.4% to $63.79/oz. Platinum was flat and palladium advanced. The Bloomberg Dollar Spot Index stabilized after a 0.3% drop in the previous session.