On December 24, growing market expectations of further Fed rate cuts in the coming year may bolster gold prices. Amid signs of easing inflation and weak employment growth, the market anticipates two Fed rate cuts in 2026, with expectations potentially rising further depending on upcoming economic data. Lower interest rates could reduce the opportunity cost of holding gold, supporting the non-yielding precious metal. Trading remained relatively subdued ahead of the Christmas holiday, as traders awaited the release of U.S. initial jobless claims data later on Wednesday for fresh momentum.
However, downside risks for gold may be limited, as persistent geopolitical uncertainties—particularly tensions between the U.S. and Venezuela—could sustain strong safe-haven demand.
Technically, while intraday upward momentum for gold has weakened slightly, the Bollinger Bands show expansion, signaling a potential continuation of the strong trend. Gold prices have been notably lifted by the upward trendline extending from late October, suggesting bullish sentiment may still dominate. Despite the overall bullish trend, the 14-day Relative Strength Index (RSI) has risen above 80, indicating an overbought market. This suggests gold may undergo a period of consolidation before the next rally, with any further upside likely constrained.
On the upside, if gold repeatedly tests the psychological $4,500 level and holds this week, it could target $4,550 and potentially challenge the $4,600 resistance.
On the downside, the primary support lies near the December 23 pullback low of $4,430. A break below this level could see prices retreat toward $4,400.
Gold Trading Strategy: (Bullish bias, but caution against sharp corrections) Near-term resistance: $4,500, $4,525, $4,550 Near-term support: $4,475, $4,450, $4,430 Intraday suggestion: Light positions at support/resistance with a ±2-point margin; initial target of 15 points, stop-loss at 5 points. Swing trading suggestion: Light positions at support/resistance with a ±5-point margin; initial target of 30 points, stop-loss at 10 points.
