Wednesday, December 17. Spot gold traded above $4,300 in pre-market trading, maintaining a slightly bullish trend in the recent high range; risk appetite shifted back and forth between macroeconomic uncertainty and liquidity expectations, causing gold's "safe haven" and "interest rate sensitive" attributes to alternately prevail.



The core driver for gold remains "real interest rate expectations." Recent weak US data has intensified market discussions about future Federal Reserve policy easing. On the employment front, the latest figure for new jobs was approximately 64,000, slightly higher than some expectations, but the previous month's data showed a significant decline due to the government shutdown, while the unemployment rate rose to 4.6%, one of the highest levels in a considerable period, reflecting clearer signs of a cooling labor market. On the consumption front, retail sales showed zero growth month-on-month, coupled with a downward revision of the previous figure, indicating a slowdown in consumer spending. For gold, this combination of "slowing but not stalled growth" often transmits through two channels: firstly, it reduces the upside potential for future nominal interest rates and yields; secondly, it increases market expectations of a marginal dovish shift in policy, thereby improving the relative attractiveness of non-interest-bearing assets.

It's important to emphasize that the current macroeconomic narrative is not entirely bullish. If inflation expectations resurface or risk appetite recovers rapidly, leading to a return of funds to high-beta assets, the demand for gold in the short term may be weakened. Conversely, if growth data continues to soften while financial conditions tighten, its safe-haven appeal and pricing in policy easing may strengthen simultaneously. In other words, gold is more like finding a balance between "uncertainty about the policy path" and "fluctuations in risk appetite." Short-term volatility stems not only from the fundamental direction itself, but also from the market's repeated adjustments to the path and pace of policy.

Market Performance

Gold prices have recovered after a previous pullback and recently risen to around $4,300. On the daily chart, the low was $3,886.51, followed by a trend reversal, forming a clear support zone around $4,200.00. Recent resistance is concentrated around the horizontal resistance zone near $4,340, with previous highs at $4,353.36 and $4,381.29, indicating repeated trading and attempts to break higher at these levels. Structurally, $4,200.00 appears to be a "cost line" where bulls and bears diverge, while the area above $4,340 is closer to a "sentiment line." The interaction between these two levels will determine whether short-term fluctuations will be a continuation of the trend or range-bound trading.



In terms of technical indicators, the MACD shows DIFF at approximately 60.33, DEA at approximately 53.37, and the histogram at approximately 13.90, all still above the zero line and maintaining positive values, indicating that medium-term momentum has not weakened significantly. However, changes in the height and slope of the histogram suggest that the expansion of momentum is not linear, and the market is more likely to exhibit a rhythm of "upward movement accompanied by pullbacks." The RSI is approximately 70.24, a common high threshold, meaning that while short-term buying power is strong, it also indicates that prices are more sensitive to positive news: when indicators are in a relatively overbought range, any macroeconomic signals that are inconsistent with expectations are more likely to trigger profit-taking volatility, but this does not automatically equate to a trend reversal, but rather reflects an increase in volatility.

Based on chart pattern analysis, the current daily chart more closely resembles the characteristics of "expanding fluctuations within an uptrend": the price is rising with larger amplitudes, reflecting both the bulls' willingness to continue at higher levels and the bears' more aggressive defense near key resistance levels. The area around $4200.00 corresponds to trend support and willingness to absorb selling pressure, while the $4340-$4380 range corresponds to high-level supply and sentiment congestion.

From a market perspective, gold's current support primarily stems from three factors: First, weaker-than-expected data has fueled discussions about a more accommodative Federal Reserve policy, thus suppressing expectations for real interest rates; second, uncertainty surrounding growth and risk events have led some funds to maintain hedging needs; and third, the technical indicators remain above the upper edge of the consolidation range, and the trend structure has not yet been broken. At the same time, the constraints are equally clear: First, if inflation data or inflation expectations rebound, leading to a rise in yields, gold's valuation support will be weakened; second, when market risk appetite significantly increases, safe-haven demand often cools marginally; and third, overheated indicators at high levels can amplify short-term volatility caused by "expectation discrepancies."

Outlook

Market focus will continue to revolve around subsequent changes in US employment and consumption, the repricing of inflation and inflation expectations, and the Federal Reserve's statements on the trade-off between growth and inflation. For gold, the key is not the quality of a single data point, but whether the combination of data alters the "main narrative of policy path": if more evidence points to a simultaneous cooling of demand and easing of inflationary pressures, the fundamental support for gold prices may be more solid; if a combination of "strong growth but stickier inflation" emerges, the reactions of yields and the US dollar may more directly impact gold price performance. Technically, whether a more convincing turnover and continuation can form near the high-level resistance zone will determine the market's perception of the trend's strength.