December 15 (Asian Market) Gold 🌟 XAUUSD Latest Analysis
Although the Federal Reserve's December monetary policy meeting resulted in a 25 basis point rate cut, the hawkish signals released far exceeded market expectations. Powell even stated that he does not rule out the possibility of restarting rate hikes. This means that the current rate cut cycle is basically coming to an end, and the expectation of rising real interest rates is becoming stronger, which naturally weakens the attractiveness of holding gold. Looking at this side, the three major central banks of the UK, Europe, and Japan are set to announce their interest rate decisions in the next few days. The European Central Bank is highly likely to remain steady and will release optimistic signals about the economy, while the probability of the Bank of Japan raising interest rates is as high as 75%. If these central banks lean towards a hawkish stance, the US dollar index is sure to rebound, and gold priced in US dollars will also come under pressure. Furthermore, the current gold price includes a premium of 15%-20% due to geopolitical risks, but this geopolitical premium generally does not last beyond three months. If the situation in Russia-Ukraine and the Middle East does not escalate further, once the safe-haven buying subsides, a decline in gold prices will become a high-probability event.
Spot gold surged to 4353.43 before directly retreating. The 4-hour chart shows a significant long upper shadow, and the RSI indicator has been stuck in the overbought zone above 70 for a long time. Although this price broke through historical highs, the subsequent upward momentum is clearly lagging, and the selling pressure from profit-taking is becoming heavier. In the short term, it is highly likely to undergo a technical correction.
(For reference only)
Gold is expected to move south near 4310-4320
Targeting the vicinity of 4290-4280, with a breakout at 4265, 4260.
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