On Friday, December 12, during the early Asian session, spot gold entered a sideways consolidation phase slightly below the opening price after a strong rally the previous night. As anticipated, gold traded sideways around $4,215 during the day, with a low near $4,205, before surging to $4,285 in the U.S. session. Yesterday’s strategy suggested buying on dips between $4,200–$4,205, targeting $4,250—though the evening rally exceeded expectations, delivering substantial profits.
Amid global economic uncertainty, gold has reasserted its role as a traditional safe-haven asset. On Thursday (December 11), gold rebounded sharply, with spot prices rising ~1.2% to a one-month high of $4,285/oz, while silver hit a record high of $64.30/oz. This rally was fueled by the Fed’s third consecutive 25bps rate cut, dollar weakness, persistent inflation pressures, and geopolitical tensions ahead of the nonfarm payrolls report. Investors should monitor how these factors shape gold’s trajectory.
**Key Drivers:** The Fed’s dovish pivot—emphasizing labor market monitoring and acknowledging elevated inflation—left room for further cuts, weakening the dollar index below 99 to a two-month low of 98.13. Gold, priced in dollars, benefited directly. Lower rates also reduced the opportunity cost of holding gold versus bonds or deposits.
U.S. jobless claims posted their largest weekly rise since the pandemic, stoking recession fears and safe-haven demand. Silver’s momentum further buoyed gold’s upside.
Geopolitical risks simmered as the U.S. signaled potential involvement in Ukraine and escalated sanctions on Venezuela, including seizing oil shipments. President Trump’s threats of "ground action" against Venezuela heightened tensions.
**Technical Outlook:** Gold’s 1H/4H charts show consolidation needs after consecutive gains. Key support now sits at $4,260–$4,242, with $4,245–$4,242 offering strong confluence (prior breakout + moving averages). Resistance awaits at $4,300, a psychological and technical target. While the uptrend is intact, avoid chasing rallies; wait for pullbacks to support for long entries.
**Today’s Strategy:** - Buy dips near $4,245–$4,242 (stop-loss: $4,230), targeting $4,260–$4,280; break above $4,300 possible. - If gold spikes above $4,280 in Asia, wait for a pullback to $4,260 for light longs. - Exercise caution ahead of weekly close; avoid overexposure to late-cycle surges. Tight risk management is key.
Looking ahead, nonfarm payrolls and geopolitical developments may offer opportunities, but stay alert to reversal risks (e.g., Fed pause or stronger global growth). Trade prudently.
*Disclaimer: This content is for informational purposes only and not investment advice.*
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