Holdings in SPDR Gold Shares, the world's largest gold ETF, increased by 2.29 tons last Friday to 1,053.12 tons, reflecting institutional investors' continued allocation to gold amid policy and geopolitical uncertainties. Analysts at Commerzbank noted that although the next FOMC meeting might pause rate cuts, expectations for further easing remain, and the actual magnitude of cuts could exceed current market pricing — especially with a potential leadership change at the Fed in May next year, leaving room for imagination about policy shifts and thus supporting gold prices. On the geopolitical front, the situation in Ukraine continues to provide safe-haven support. Ukrainian President Zelensky acknowledged that any peace plan requires compromise from all sides, while the U.S. and Europe have adopted a cautious stance on Ukraine's NATO membership, shifting toward offering security guarantees in exchange for Ukrainian concessions. Meanwhile, the U.S. and Ukrainian delegations will continue consultations on the peace process soon. On another front, the EU has agreed to freeze Russian central bank assets held in Europe; Russia's central bank has sued Euroclear and warned the EU against using frozen funds, indicating ongoing financial confrontation and persistent safe-haven sentiment. Looking ahead, this week will bring a series of key data releases and events that could significantly affect market views on monetary policy and economic trends. Highlights include: 1. U.S. nonfarm payrolls for October and November, plus November retail sales data, will be released on Tuesday. 2. U.S. November CPI inflation data will be released on Thursday. In addition, the Bank of England and European Central Bank will announce interest rate decisions, and preliminary PMI figures for several Western countries will be released. As this is the last full trading week before the Christmas holiday, liquidity conditions may amplify price volatility. If economic data show sticky inflation or resilient labor markets, expectations for Fed rate cuts in 2026 may be recalibrated, possibly leading to revised scenarios of "fewer cuts or even a pause," which could trigger deeper technical corrections in gold. Investors should closely monitor interactions between data and policy signals and guard against heightened volatility risks.

According to CME FedWatch data, markets currently assign a ~76% probability that the Fed will keep rates unchanged in January 2026, compared with 70% before the December rate cut announcement. Hawkish remarks from Fed officials last week may boost the dollar and pressure USD-denominated commodities. Traders will watch speeches Monday evening by Fed Governor Stephen Miran and New York Fed President John Williams for further clues. Comments from multiple Fed officials on Friday disrupted market rate-cut expectations: Cleveland Fed President Mester (voting member in 2025) favored a more restrictive stance to strengthen inflation control; Chicago Fed President Goolsbee and Kansas City Fed President Schmid both dissented from this week's Fed rate cut decision, citing still-high inflation. These statements narrowed market expectations for the 2026 rate-cut path. Coupled with tightening year-end liquidity and the transition between years, volatility was further amplified, triggering short-term concentrated selling in gold and other assets. Although the latest Fed dot plot points to only one 25-basis-point cut in 2026, this expectation remains highly dependent on incoming data, and the policy path retains flexibility.  

Based on the weekly chart, Bollinger Bands are expanding upward, with price oscillating along EMA12 and the upper band, indicating the short-term uptrend remains intact. The MACD shows a "kiss of angels," indicating that upward momentum has weakened slightly, but the trend persists, with potential for pullbacks at any time. RSI stands at 76, reflecting strong bullish sentiment, while resistance levels are at 4400 and 4500. Moving to the daily chart, price is rising strongly along the upper Bollinger Upper Band, likely to challenge previous highs and round-number levels near 4381 and 4400. MACD's upward histogram has weakened, but the "kiss of angels" signal appears, typically marking continuation of the rally. Meanwhile, staying at 73, the RSI indicates overbought territory, yet higher lows suggest underlying strength. Thus, it is recommended to buy at lows.

Trading direction: Buy

Entry price: 4288

Target price: 4400

Stop loss: 4100

Support: 4200/4100/3800

Resistance: 4380/4500/5000