On December 22, gold prices continued their remarkable rally last week, overshadowed slightly by silver's 132% annual surge to a historic high of $67.45. However, gold's own 65% annual gain reaffirmed its status as a core precious metal. As the new week begins, markets brace for the Christmas holiday, but delayed Q3 GDP data—postponed due to the U.S. government shutdown—will be closely watched.
Early Monday (December 22) in the Asian session, spot gold reached a historic milestone, soaring past the key resistance level of $4,381/oz amid frenzied buying. Currently trading near $4,380, gold has gained over 1% intraday. Yet, behind this euphoric breakout, market sentiment appears overheated, with technical indicators flashing severe overbought signals—entering a high-risk "overheated zone" of opportunity and volatility.
The primary catalyst for this morning's surge was commentary from a leading Fed chair candidate, Hassett, who emphasized "ample room for further rate cuts" and declared the era of excessive inflation over. Additionally, geopolitical tensions escalated following Trump's remarks on potential military conflicts, compounded by U.S. sanctions on Venezuelan oil tankers, fueling fears of energy supply disruptions and driving safe-haven demand.
Technically, the 5-day moving average near $4,340 remains critical short-term support. However, today's sharp rally above $4,380 reflects extreme speculative sentiment in Asian trading hours. Resistance is now seen at $4,380–4,390 on the hourly chart. A further push could test $4,400, but with limited fundamental drivers, this rally should be treated cautiously—avoid blind chasing.
In summary, sentiment has shifted from optimism to euphoria. Severe deviations from short-term moving averages, overbought conditions, and potential silver volatility suggest an impending healthy correction or consolidation to digest recent gains before the next leg up. Any unexpected hawkish remarks or a silver sell-off could trigger outsized swings and a "long-short squeeze." That said, if prices breach $4,400 decisively, a tactical long position may be warranted.
Today’s Trading Strategy: Gold: Sell at $4,385–4,390, stop-loss at $4,400, targeting $4,350–4,320–4,300. If $4,400 is breached, exit shorts and go long, aiming for $4,420–4,430.
Key Economic Data/Events for Monday, December 22, 2025: (No additional commentary on data/events provided in the original text.)
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should exercise independent judgment.
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