On Monday (December 11th), gold prices closed at $1980.69, down 1.1%, reaching their lowest level since November 20th at $1975.70.
The strong employment data on Friday led to some adjustments in expectations for the Federal Reserve's interest rate cut next year, providing opportunities for a rebound in US dollar and bond yields, which continued to put gold under pressure on Monday. Next, this week's US December interest rate meeting will be the focus of market attention. At a critical moment when the Federal Reserve is about to make its latest interest rate decision this week, Nick Timiraos, the chief economist of The Wall Street Journal, known as the "Federal Reserve's mouthpiece," reported on Sunday local time that Federal Reserve officials are unlikely to have serious discussions about when to cut rates this week and may not discuss it in the coming months unless the economic weakness exceeds expectations. Timiraos warns that premature rate cuts by the Federal Reserve without curbing inflation would be a major mistake. The Federal Reserve does not want to repeat the mistakes of 1967, when it boosted weak economic growth by lowering interest rates, only to see prices soar. Michael Feroli, Chief Economist of JPMorgan Chase, believes that Federal Reserve Chairman Powell will not be involved in the discussion of interest rate cuts. He said, "At the press conference, we believe Powell will try to shift the topic away from the time of the first easing, and he will point out that the committee is currently only considering whether to keep the policy unchanged or tighten it." Michael Pearce, Chief US Economist at Oxford Economics, also believes that Wednesday's press conference was slightly hawkish, This indicates that Powell and the Federal Reserve tend to maintain higher interest rates for a longer period of time. Stephen Gallagher, Chief Economist of Societe Generale in the United States, said that at the press conference, Powell would even remind the market that if inflation accelerates again, the Federal Reserve may have to raise interest rates again. Analysts point out that if Powell makes hawkish remarks this week, the US dollar is expected to experience a strong rebound and push gold prices further down. In summary, from the analysis and opinions of authoritative institutions, it is highly likely that Federal Reserve Chairman Powell will make a hawkish statement at his last press conference this year, which may continue to put pressure on gold prices.
After closing below the upward trend support level of $2024 per ounce last Friday, the trend has shifted in favor of sellers. On the 14th, the relative strength index (RSI) was also below the 50 level, entering a bearish zone, indicating a further weakening trend in gold prices in the future. If the overnight low of $1980 completely breaks through, it is not ruled out that gold prices may further fall into the $1965-1945 range. This price range is the intersection of the low point on November 20th and the simple moving average (SMA) on November 50th. Gold buyers need to push the daily closing price above the 21 day moving average of $2005 per ounce in order to stabilize the recent decline.
