Santa Rally’s Final Test: Will US GDP Sustain the Record Run?

Ultima Markets Daily Market Insights – December 23, 2025

The “Santa Claus Rally” is officially underway, with global markets surging into the holiday-shortened week. A powerful combination of renewed AI optimism and a weakening US Dollar has pushed major equity indices back toward all-time highs, while Gold has broken decisively into uncharted territory.

Tech Led the Charge, Dollar Weakness Fuels Gold

Wall Street extended its winning streak for a third consecutive session, driven by a resurgence in the “AI trade.” Nvidia (+1.5%), Oracle (+3.2%), and Micron Technology (+4.0%) led the advance, reinforcing confidence that the Artificial Intelligence boom remains intact heading into 2026.

Meanwhile, the US Dollar remains under sustained pressure as markets fully price in aggressive Federal Reserve rate cuts for early 2026. This has created a “perfect storm” for both equities and precious metals.

The US Dollar Index remains heavy, losing ground around the 98.00 level and struggling to find meaningful support. Recent soft inflation data is widely interpreted as a green light for the Fed to prioritise growth over price stability. Capitalising on the weaker Greenback and falling yields, Gold surged more than 2% to a fresh all-time high near $4,475/oz at the time of writing. Silver also joined the rally, climbing to a record high around $69.7/oz.

Today’s Highlight: US GDP as the Final Test

With liquidity thinning rapidly ahead of tomorrow’s early market close, today’s US GDP release stands as the final major macro event of the week.

The final Q3 US GDP reading is expected to confirm growth of 3.2% QoQ.

• Bullish Case: A print near expectations (~3.2%) would reinforce the “soft-landing” narrative—solid growth alongside cooling inflation—likely sustaining equity strength into the Christmas period.
• Bearish Case: A meaningful downward revision (e.g. below 3.0%) could re-ignite recession concerns, potentially cooling risk-asset enthusiasm while driving further upside in Gold and possibly the US Dollar on safe-haven demand.

That said, the bearish scenario would require a material downside surprise. Absent a shock, the market is likely to maintain its Santa Rally bias, supported by positive seasonality, easing financial conditions, and positioning into year-end.

US Dollar Outlook: Breakdown or Bear Trap?

The U.S. Dollar Index (DXY) has officially entered a fragile state, breaking below critical structural support as the “Fed Pivot” trade accelerates.

The USDX is currently trading heavy below the 98.00 psychological handle. This level was previously a staunch support zone throughout the year; losing it signals that the path of least resistance has shifted decisively lower.

USDX, H4 Chart | Ultima Markets MT5

With 98.00 compromised, the next major downside target lies at 97.7, a clean break here would expose the 97.10 region.

Resistance: Any intraday rally following the GDP data is likely to face stiff selling pressure near 98.40. On the broader outlook, bulls would need to reclaim 99.00 to invalidate the current bearish trend.

Outlook: The bias remains to “sell into rallies.” Unless today’s GDP data delivers a massive upside shock, traders are likely to view any Dollar strength as an opportunity to reload short positions or add to long Gold exposures before year-end books close.

Daily Market Takeaway

Today is the final liquidity hurdle of 2025. The primary trend remains clear: Long Risk (Stocks), Long Gold, Short Dollar.

• Long Risk (Stocks): The “Santa Rally” is fully active, supported by AI optimism and year-end seasonality. If GDP lands near 3.2%, expect major indices to drift higher toward record highs into the close.
• Long Gold: Momentum has pushed prices into uncharted territory ($4,475+). With the “perfect storm” of falling yields and a weak Dollar, the path of least resistance remains higher, making dips attractive.
• Short US Dollar: The breakdown below 98.00 signals a structural shift. The outlook is bearish with immediate targets at 97.70; any intraday rallies are likely to face selling pressure.
• Key Event (US GDP): Watch the 3.2% growth figure closely later today. A significant miss could trigger a surprise volatility spike, potentially disrupting the calm right before the Christmas holiday.

Disclaimer

Comments, news, research, analysis, price, and all information contained in the article only serve as general information for readers and do not suggest any advice. Ultima Markets has taken reasonable measures to provide up-to-date information, but cannot guarantee accuracy, and may modify without notice. Ultima Markets will not be responsible for any loss incurred due to the application of the information provided.