Gold hits all-time highs! Will this strong trend continue?

Gold hits all-time highs! Will this strong trend continue?

On Tuesday (December 23), driven by a weaker U.S. dollar and rising geopolitical risks, gold prices once again broke through historical highs. Spot gold briefly approached the US$4,500/ounce mark, hitting a maximum of US$4,497.55, and finally closed at US$4,458.94, with a daily increase of 0.29%. New York gold futures also rose 1.2% in one day, recording the largest daily gain since December 11. The U.S. dollar index fell for a second straight day, heading for its biggest annual drop since 2017, adding to the appeal of the dollar-denominated precious metal.

Silver also posted a strong performance, rising in tandem with gold to reach new all-time highs. Investors are returning to precious metals as a hedge against risks from inflationary pressures, geopolitical instability and a prolonged period of low real interest rates.

🔍Main factors behind price increase

1️⃣ Low real interest rates
As inflation expectations continue to exceed nominal interest rates, the opportunity cost of holding non-interest-bearing assets such as gold has dropped significantly, providing strong support for gold prices.

2️⃣ Increased demand for safe havens
Ongoing geopolitical tensions in Europe and the Middle East, coupled with concerns about global economic growth, have prompted funds to invest in traditional safe-haven assets such as gold. Silver, with its dual industrial and monetary properties, also benefits from this monetary influence.

3️⃣Weak dollar
Expectations of a dovish Fed stance and market expectations of continued low interest rates weighed on the dollar. Commodities priced in U.S. dollars generally benefited, attracting investors holding currencies other than the U.S. dollar to increase their investments.

4️⃣ Positive capital flow
Recent inflows into gold and silver ETFs suggest that institutional and retail investors are adding precious metals to their portfolios to prepare for potential market volatility.

5️⃣ Geopolitics and political expectations
Geopolitical tensions have intensified, market risk aversion has increased, and the market has begun to digest the possibility of future interest rate cuts. Speculation about a possible shift to looser monetary policy also boosted the investment value of precious metals.

📊 Technical Analysis
Yesterday, gold tested the 4495-4500 area as scheduled, and then encountered resistance and fell back. It is currently falling slightly to the support level of 4430-4440. Look at the four-hour chart:

✅The price of gold remains stable above the 100-period moving average, indicating an obvious upward trend;

✅ Bollinger Bands expand, volatility increases, and the trend is clear;

✅ The Relative Strength Index (RSI) is in a strong position above the midline. Although not overbought, caution is advised when chasing prices higher.

Overall, gold remains in a strong position, but may see some consolidation in the short term following continued gains. As the Christmas holiday approaches, trading volume may gradually decrease, making a sharp correction less likely, but the pace of gains may gradually slow.

🎯 Trading strategy suggestions

Basic trading strategy: buy when low, sell when high, and accurately control position size and stop loss orders!

🟢 Opportunities to buy centers:

Entrance area: 4430–4440

Target: 4470 ← 4500 ← 4530 (hold position if exceeded)

Stop loss: less than 4422

Market Sentiment Analysis: This is the support area of ​​the trend; we are optimistic that it will fall first and then rise! 🎯

🔴Short Selling Opportunities:

Entrance area: 4497–4500

Target: 4470→4450→4430

Stop loss: above 4508

Market sentiment analysis: The 4500 level is facing selling pressure. You can try to open a short position with one touch, but remember to get in and out quickly! ⚠️

💡Important reminder
Market liquidity may decrease before and after the holidays, and volatility may increase. Please trade with small positions and set stop loss orders carefully.

Although the trend is strong, it is not recommended to break through the top. It is best to be patient and wait for a price correction to occur before taking any position.

The strategies in this article are based on pre-launch market conditions. Intraday price action is volatile; please adapt to current market conditions.

🆘 What should I do if I lose money in trading?

😰 If you are stuck in a losing trade: This means that the direction you took may be wrong. Don’t be stubborn and hold on! Waiting to exit a losing trade in a rising market may only lead to more losses. Resolutely stop losses, preserve funds, and keep up with the market rhythm. A few well-thought-out trades are better than stubbornly sticking to them.

😅 If you are stuck in a small loss trade: For example, if your stop loss order is triggered by only a few points, you can flexibly adjust your strategy according to market fluctuations, and you may even have a chance to turn a loss into a profit. The secret is to have a clear exit plan and discipline.

🤔 If you repeatedly end up in losing trades: the problem may be with your trading system. The market has no mercy on tears. Learning independent analysis and strict risk control is the key to long-term survival. Let’s work hard together! 💪

The above analysis is for reference only and does not constitute investment advice. Trading involves risk; so please invest with caution!

✨ I wish everyone a Merry Christmas, successful transactions, and prosperous accounts! 🎄