Gold prices remained range-bound at high levels, awaiting the release of US non-farm payroll data.
2025-12-16 09:36:17
Gold prices continued their strong performance during Asian trading hours, rising to around $4,315, a new high for the period. The core driver of the price increase remains the rising market expectations for further interest rate cuts by the Federal Reserve.
With the Federal Reserve's third interest rate cut this year taking place last week, the policy stance continues to lean towards easing, putting pressure on real interest rates and significantly increasing the attractiveness of gold, which does not offer interest income.
Judging from policy signals, the Federal Reserve has adopted a relatively cautious stance in its latest summary of economic projections, with the median dot plot suggesting only one 25-basis-point rate cut by the end of 2026.
However, the financial markets' interpretation is clearly more dovish, with interest rate futures pricing generally reflecting expectations of at least two rate cuts this year. This expectation gap provides additional support for gold prices, and unless subsequent economic data shows a significant rebound, market bets on easing policies may further strengthen.
Due to the shutdown of the US federal government, a number of key macroeconomic data releases have been delayed. The non-farm payroll report, retail sales, and purchasing managers' index will be released in a concentrated manner, becoming the main trigger for short-term market volatility.
If employment and consumption data signal an economic slowdown, it will further solidify market expectations for an interest rate cut path, thereby pushing gold prices to higher levels. Analysts point out that once the data weakens significantly, gold is likely to continue attracting capital inflows at higher levels.
However, geopolitical factors have weakened their support for gold. Positive signals from peace talks surrounding Ukraine have eased market concerns about a prolonged conflict, reducing demand for gold as a traditional safe-haven asset.
Amid the interplay between supportive monetary policy and a cooling of safe-haven appeal, gold prices are more susceptible to direct influence from US macroeconomic data in the short term.
From a technical perspective, gold prices remain within a clear upward channel, and the medium-term bullish structure remains intact. Prices continue to trade above major moving averages, indicating a generally strong market trend and a high tolerance for pullbacks.
Gold prices have recently accelerated their upward trend and hit new highs, reflecting that bulls have gained a clear advantage, supported by positive fundamentals. The $4,280 area forms the first support level for any short-term pullback; this level is both the lower edge of the recent consolidation range and has some psychological support significance.
If gold prices experience a technical pullback, as long as they can hold this level, the overall strong trend is likely to continue. Further downside, the $4200 level is a significant previous breakout platform and a key area for bulls to defend. If the pullback stops at this level, the market is more likely to view it as a healthy correction within the upward trend.
On the upside, gold prices currently face initial resistance around $4,350, a region that coincides with both a short-term target and a psychological level. A breakout with strong fundamentals could see gold prices further test the $4,400 psychological level.
This position is not only psychologically significant, but it is also close to the upper edge of the upward channel. If it cannot hold firmly, we need to be wary of the risk of a pullback caused by high-level profit-taking.
Overall, the technical and fundamental factors remain in sync. As long as gold prices remain above key support levels, the trend is likely to continue upward, and high-level consolidation is more likely to be seen as a correction within an uptrend rather than a trend reversal signal.
Editor's Note:
The core driver of the current gold price increase remains the expectation of a Federal Reserve rate cut and the decline in real interest rates. Market sentiment is cautiously optimistic ahead of the release of key US economic data. Short-term caution is warranted against increased volatility at high levels, but gold still offers value for buying on dips until the logic of policy easing is disproven. The medium-term trend will depend on whether US employment and consumption data truly point to an economic slowdown.
With the Federal Reserve's third interest rate cut this year taking place last week, the policy stance continues to lean towards easing, putting pressure on real interest rates and significantly increasing the attractiveness of gold, which does not offer interest income.
Judging from policy signals, the Federal Reserve has adopted a relatively cautious stance in its latest summary of economic projections, with the median dot plot suggesting only one 25-basis-point rate cut by the end of 2026.
However, the financial markets' interpretation is clearly more dovish, with interest rate futures pricing generally reflecting expectations of at least two rate cuts this year. This expectation gap provides additional support for gold prices, and unless subsequent economic data shows a significant rebound, market bets on easing policies may further strengthen.
Due to the shutdown of the US federal government, a number of key macroeconomic data releases have been delayed. The non-farm payroll report, retail sales, and purchasing managers' index will be released in a concentrated manner, becoming the main trigger for short-term market volatility.
If employment and consumption data signal an economic slowdown, it will further solidify market expectations for an interest rate cut path, thereby pushing gold prices to higher levels. Analysts point out that once the data weakens significantly, gold is likely to continue attracting capital inflows at higher levels.
However, geopolitical factors have weakened their support for gold. Positive signals from peace talks surrounding Ukraine have eased market concerns about a prolonged conflict, reducing demand for gold as a traditional safe-haven asset.
Amid the interplay between supportive monetary policy and a cooling of safe-haven appeal, gold prices are more susceptible to direct influence from US macroeconomic data in the short term.
From a technical perspective, gold prices remain within a clear upward channel, and the medium-term bullish structure remains intact. Prices continue to trade above major moving averages, indicating a generally strong market trend and a high tolerance for pullbacks.
Gold prices have recently accelerated their upward trend and hit new highs, reflecting that bulls have gained a clear advantage, supported by positive fundamentals. The $4,280 area forms the first support level for any short-term pullback; this level is both the lower edge of the recent consolidation range and has some psychological support significance.
If gold prices experience a technical pullback, as long as they can hold this level, the overall strong trend is likely to continue. Further downside, the $4200 level is a significant previous breakout platform and a key area for bulls to defend. If the pullback stops at this level, the market is more likely to view it as a healthy correction within the upward trend.
On the upside, gold prices currently face initial resistance around $4,350, a region that coincides with both a short-term target and a psychological level. A breakout with strong fundamentals could see gold prices further test the $4,400 psychological level.
This position is not only psychologically significant, but it is also close to the upper edge of the upward channel. If it cannot hold firmly, we need to be wary of the risk of a pullback caused by high-level profit-taking.
Overall, the technical and fundamental factors remain in sync. As long as gold prices remain above key support levels, the trend is likely to continue upward, and high-level consolidation is more likely to be seen as a correction within an uptrend rather than a trend reversal signal.
Editor's Note:
The core driver of the current gold price increase remains the expectation of a Federal Reserve rate cut and the decline in real interest rates. Market sentiment is cautiously optimistic ahead of the release of key US economic data. Short-term caution is warranted against increased volatility at high levels, but gold still offers value for buying on dips until the logic of policy easing is disproven. The medium-term trend will depend on whether US employment and consumption data truly point to an economic slowdown.
- 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.
