I. Basic news context
1. The Federal Reserve's interest rate meeting is the core variable of the market
The Federal Reserve will hold its last interest rate meeting of 2025 on December 10-11, with the current market expecting a 90% probability of a 25 basis point rate cut in December. This expectation stems from recent moderate statements by Federal Reserve officials. However, caution should be exercised regarding the risk of a 'hawkish rate cut.' Analysts warn that the Federal Reserve may send cautious signals when cutting rates to raise the threshold for subsequent cuts. If the market subsequently lowers its expectations for rate cuts in 2026, the dollar may gain support, putting pressure on gold prices in the short term. The outcome of this meeting is also seen as a 'turning point' for the gold market.
2. Geopolitical and trade risks provide safe-haven support
- Geopolitical aspect: As the US pressures Russia and Ukraine for talks, leaders from France, Germany, and the UK meet with the Ukrainian president and clearly express support, the persistence of the Russia-Ukraine conflict is reinforced, and geopolitical tensions drive safe-haven funds into gold, providing upward momentum for gold prices.
- Trade area: Trump stated that new tariffs may be imposed on Canadian fertilizers, Indian rice, and threatened to impose a 5% tariff on Mexico in exchange for a specified amount of water resources, further escalating trade frictions and enhancing market risk-averse sentiment, which is favorable for gold.
2. Technical analysis
1. Overall range-bound, weakening upward momentum
From the 4-hour perspective, the MACD indicator shows a death cross, and the short-term moving averages are flattening, indicating a significant weakening of short-term upward momentum, and further compression of price volatility. Meanwhile, the gold price is at the end of a converging triangle, a typical manifestation of extreme caution in the market before major events, making it difficult to determine a clear direction in the short term, likely maintaining a range-bound trend.
2. Indicators show proximity to a turning point
The daily RSI indicator reports 67, close to the overbought range but has not yet formed a divergence; the KDJ indicator is about to open after consolidating at a high level, indicating the technical foundation for a reversal is in place. Additionally, gold has previously failed to breach high resistance levels in three attempts, and the current balance of bullish and bearish forces is extreme; any external stimulus could break the current range-bound pattern.
3. Key support and resistance levels
- Resistance level: $4220-$4230 (the primary resistance range for the day, located near the upper boundary of the recent fluctuation range; bulls must first break through this range to further advance)
- Resistance level: $4250-$4260 (strong resistance zone, previous attempts to breach this zone by gold prices have ended in failure; only a strong breakout with high volume can open up upward space towards $4300)
- Support level: $4165 (strong support point, if the core support range above fails, this point will become an important defense line; if it rebounds without breaking, the bulls still have a chance to come back)
3. Market outlook
Short-term gold is likely to face directional changes; today's and the 10th's Federal Reserve meeting is the core catalyst for market breakthroughs:
- If the Federal Reserve releases dovish signals (such as confirming a 25 basis point rate cut in December and implying multiple rate cuts in 2026), London gold is expected to break through the strong resistance at $4260, with short-term targets in the $4300-$4350 range;
- If hawkish signals are released (such as a rate cut while emphasizing a pause in easing, or even maintaining interest rates), gold prices may fall below the strong support at $4150, dipping into the $4100-$4050 range.
Before the meeting results are announced, gold is likely to show short-term fluctuations within the $4165-$4230 range, characterized by high selling and low buying.
