On December 19, gold, regarded as the ultimate safe-haven asset by global investors, experienced another roller-coaster trading session on Thursday (December 18). The release of the U.S. core Consumer Price Index (CPI) for November at 9:30 PM showed a decline to its lowest level since early 2021, with both headline and core CPI dropping. Gold initially rose modestly to $4,343 before retreating to $4,308, then surged to $4,374—a near two-month high—approaching its all-time peak of $4,381 per ounce. However, gains were quickly erased, and prices closed barely holding ground at $4,332, reflecting a choppy trading pattern. The daily chart ended with a bearish candle featuring long upper and lower wicks.
Key Fundamentals: November’s CPI came in at 2.7% year-on-year, below the expected 3.1%, reinforcing expectations of a 25-basis-point Fed rate cut in March. The 10-year U.S. Treasury yield fell to 4.12%, reducing gold’s holding costs. However, potential distortions due to the government’s "continuation method" during shutdowns raised doubts about actual inflation and policy timing, triggering profit-taking by bulls.
The European Central Bank (ECB) kept rates unchanged, as expected, with officials signaling the end of the easing cycle. The Bank of England (BoE) cut its benchmark rate from 4.00% to 3.75%, also in line with forecasts, though Governor Bailey hinted at slower future cuts. The Bank of Japan (BoJ) raised rates by 25 basis points, maintaining an accommodative stance.
Geopolitical Developments: The U.S. imposed sanctions on 29 oil tankers and their management companies, targeting Iran’s "shadow fleet" transporting oil and petroleum products. U.S. Middle East envoy Whitkov is set to meet senior officials from Qatar, Egypt, and Turkey in Miami on December 19 to discuss Phase 2 of the Gaza ceasefire. Reports suggest all parties view Israel and Hamas as delaying implementation, prompting urgent efforts to broker compliance.
Technical Analysis: Gold’s daily chart shows yesterday’s volatility, with early consolidation aligning with technical trends and exposing the fragility of prior gains. The evening’s data disrupted sentiment, leading to a spike and retreat, closing as a bearish doji—indicating weak bullish conviction. Overbought conditions and divergence in moving averages suggest a corrective pullback is likely. Friday’s closing will influence weekly charts, raising risks of a reversal.
Resistance is seen at $4,365–70 (daily range high), while support lies at the 5-day moving average ($4,320). Early Friday trading breached this level twice; a sustained break could test the 10-day MA near $4,280.
Hourly Chart Outlook: Post-CPI volatility confirmed strong overhead resistance, increasing downside risks. A prolonged sideways consolidation may precede a sharper decline. Immediate support is at $4,310–05; a breakdown could extend losses to $4,280–70.
Trading Strategy: Short positions may target $4,330–32 (stop-loss above $4,340), aiming for $4,315–10 (partial exit) and $4,300. A rebound above $4,330 could warrant shorts at $4,345–50. Longs may consider $4,305–00 (stop-loss at $4,295) for a quick bounce to $4,320. A deeper drop to $4,375–70 with stabilization may offer short-term long opportunities. Adjustments will follow real-time conditions.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should proceed at their own risk.
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