The gold market has shown a fascinating trajectory, marked by fluctuations dictated by various economic indicators and geopolitical tensionsAs we reflect on the recent trading day, specifically Monday, December 23, we observed a notable shift in gold prices, which encountered resistance and recorded a decline, despite maintaining a position above the critical 100-day moving averageThe bullish sentiment, although present, seemed to struggle against a backdrop where short-selling remains dominant until a clear break above the 60-day moving average is achievedAnalyzing the weekly chart, the price continues to operate beneath both the 5-week and 10-week moving averages, adding to a bearish outlook seen across various indicators, which point to a lack of positive catalyst in the economic landscape propelling gold prices upwardsHence, the market remains largely in a state of weak oscillation.

On intraday specifics, gold opened at a price of $2623.38 per ounce during the Asian market hours and experienced a temporary downturn, dipping to around $2617 before rebounding

By mid-session, around 3 PM local time, gold hit an intraday peak of $2632.98. However, this bullish moment was short-lived, as prices encountered resistance and began to decline during the European market hours, pressing toward new lowsBy midnight, a low of $2608.14 was recorded during the US trading session, but a consolidation occurred thereafter with a recovery from these lows, ultimately closing the day at $2612.72. This trading session registered a daily range of $24.84 and concluded with a loss of $10.66, or a decrease of 0.41%.

Several influences played crucial roles in the observed market movementsBoth the dollar index and the yield on 10-year US Treasury bonds faced resistance, which fostered a stronger dollar, subsequently weighing on gold pricesAs the market approaches the festive holiday period, trading volumes have been lighter, which also exerted less support for gold, allowing the dollar to remain at a two-year high

This technical resistance further facilitated the declines post the peak experienced during the sessionDespite favorable data emerging from the US market, which momentarily boosted prices, the overall impact was limitedThe government's avoidance of a shutdown crisis and traders grappling with the likelihood of minimal interest rate cuts next year added to a bearish tone, as data suggests a 91.4% chance that the Federal Reserve will keep rates unchanged in January.

Looking ahead to Tuesday, December 24, a clear upside may continue as gold opened by leveraging the recovery momentum observed in the prior closing session, supported by the buying demand generated at the 100-day moving averageYet, it's essential to highlight that the charts are peppered with a multitude of resistance lines from various moving averagesSpecifically regarding the dollar index, its strong performance has the potential to constrain gold's bullish aspirations

Indeed, the daily chart continues to reflect an upward trajectory, showing no signs of peaking or reverting to bearishnessFurthermore, this strength carries into weekly patterns, which also suggest a continued bullish march, pressuring the gold prices downward while the monthly chart has recently broken through a two-year trading range, indicating further potential for a rally.

The 10-year Treasury yield also reflected resilience after breaking through a downward trend line, maintaining moderately strong performance moving upwardsThe opening of the Bollinger Bands signifies an expansion, reinforcing bullish signals across various indicators, which seem to echo through the weekly patternsThis positive viewpoint hints at a favorable outlook in the coming weeks for upward movements in yields, further asserting an adverse impact on gold.

Overall, the short-term outlook suggests both the dollar index and yields are likely to strengthen, exerting downward pressure on gold prices

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Subsequently, gold prices may find themselves in a prolonged period of consolidation at elevated levels or experiencing potential declines over the coming monthsObserving the data releases from the US, particularly the Richmond Fed Manufacturing Index for December, market anticipations lean towards outcomes that could negatively affect gold prices, aligning with the current pricing activities as traders remain primarily bearish.

In terms of fundamental developments, recent comments from the Federal Reserve reflected a toned-down approach regarding potential interest rate cuts for 2025, where Powell emphasized a cautious stance, intertwining it with robust economic growth narrativesA slew of favorable economic data further contributed to downward pressures on gold, dragging it into lower territoriesAs seen from the CME’s “Fed Watch” tool, there is a 91.4% probability that interest rates remain unchanged in January, with an 8.6% chance of a 25 basis point cut

Meanwhile, there’s a 54.9% chance of maintaining current rates until March, indicating a potential 41.7% probability of a cumulative 25 basis point cut over the same periodThis framework underscores a bearish sentiment regarding gold in the near term.

Traders should keep a watchful eye on notable supports at the 30-week and 60-week moving averages, which could herald significant bullish reboundsThe prospect of continued monetary easing still looms as Powell mentioned that inflation goals might take another year or two to meetIt’s unlikely the Fed would increase rates next year; thus, the absence of any negative factors throughout 2025 suggests that the market will either stabilize at elevated levels or aim to approach the $3000 threshold before ultimately shifting toward a bearish sentiment.

The underlying tensions from geopolitical uncertainties, the turbulence within the US political landscape, and expectations of a slowdown in global economic growth will undoubtedly bolster demand for gold as a safe haven asset

Although we may see volatility in gold prices in the near term, it remains a significant refuge for global investors navigating through uncertain environments.

From a technical perspective, examining the monthly charts reflects that following the drop below the 5-month moving average in November, gold prices rallied above this support and created a long lower shadow, indicating that short-selling pressure may have exhausted itself, giving way to bullish sentimentHowever, there are still measurements indicative of a topping formation, thus the performance this month could determine the sentiment moving forwardShould this month fail to exhibit a bullish reversal and close positively, models suggest that regardless of whether gold trades above or below this support, the projection of continued weakening appears inevitable until the market can revisit crucial support levels before possibly resuming upwards momentum.

On a weekly framework, the recent peak followed by a retreat did not hold above the 10-week moving average, and with the proximity of this week to the same resistance, it renders the ongoing trend precarious, indicating potential for low movement to revisit the 30-week and 60-week moving average supports