Gold vs. US Dollar Market Analysis (XAUUSD)

First, let me talk about my trading philosophy: I do not pursue huge profits. Stability is key. If your account is consistently profitable, you’re one step closer to success.

Secondly, it is better not to place any orders than to leave a pending order or try to enter a new trade. These are risk control techniques. In trading, you must first learn to manage and control risks. I think this includes: not leaving pending orders, not trying to enter new trades, and not using excessive leverage.

If you can apply these three points, you will definitely succeed in this market. Important reminder: any teacher who treats you like royalty, dares not speak loudly and teach you, you will never profit from him because he will not care about you.

Markets are closed for the Christmas holiday.

On Wednesday (December 24), the price of gold broke through the US$4,500 mark and hit a record high of US$4,525.70. Then the upward momentum came to an abrupt end. Gold prices fell sharply from record highs and ended lower. Profit-taking due to a lack of liquidity during the holidays caused gold prices to fall from all-time highs. However, safe-haven demand, expectations of further monetary easing from the Federal Reserve, and a weaker U.S. dollar continue to support overall positive sentiment. Market liquidity declined and volatility increased in the run-up to Christmas, spurring minor profit-taking at higher levels. Bloomberg analysis shows that as the strong rally in the precious metals market comes to an end, some traders have begun to take profits. Technical indicators also support the sell-off. Gold’s 14-day relative strength index (RSI) entered overbought territory on Wednesday, indicating that the uptrend may be retracing or pausing.

Recent gains in gold prices have bolstered its appeal as a safe haven, especially in light of rising tensions in Venezuela, where the United States has imposed a blockade on Venezuelan oil tankers. Traders also expect the Federal Reserve to further lower borrowing costs next year, which would benefit the non-yielding precious metal. The U.S. Coast Guard is awaiting the arrival of more troops and may try to board an oil tanker linked to Venezuela and seize it, a U.S. official told Reuters. The Coast Guard has been pursuing the tanker since Sunday. U.S. President Donald Trump said on Tuesday he would like the next Federal Reserve chairman to cut interest rates if markets perform well. The Fed has cut interest rates three times this year, and traders now expect two more cuts next year. Gold typically performs well in low interest rate environments and periods of uncertainty. The rise in precious metal prices was mainly due to increased purchases of gold by central banks and inflows into exchange-traded funds.

Since the beginning of this year, precious metal prices have generally risen sharply, with silver rising by as much as 149% and gold rising by more than 70%. Platinum and palladium are also up about 145% and more than 85% respectively. The rise was largely due to factors such as limited mine supply, uncertainty about tariffs and a shift in investment demand away from gold. Market analysts believe that profit-taking after hitting all-time highs is one of the reasons for the price correction. U.S. President Trump’s recent comments about wanting the next Federal Reserve chairman to cut interest rates continue to influence market expectations, with traders now expecting the Fed to cut interest rates twice next year. At the same time, geopolitical factors have also added more uncertainty to the market.

Judging from the current market situation, gold fell slightly yesterday and closed in a doji candlestick pattern, but this decline failed to resist the strong upward trend. The market is expected to continue trading based on the short-term five-day moving average and, at worst, the ten-day moving average, both of which indicate strong selling pressure. Looking at the four-hour chart, gold prices are currently supported by the middle line of the Bollinger Band above the 4440 mark, while facing repeated resistance below the 4500 mark. Yesterday, the price briefly broke above the 4525 level but failed to close above it. Therefore, Friday will focus on whether the resistance level of 4,500 points can be held. On the hourly chart, gold prices closed at a relatively high level. After bottoming out, the pullback to the 5-day moving average and the lower Bollinger Band indicates the possibility of further upward movement. Therefore, the focus on Friday will be to be patient and wait for a breakout of this level.

The market saw a slight correction due to pre-Christmas profit-taking, but this did not stop the overall strong upward trend, which ended at 4479. The short-term trend still shows strong momentum to challenge the 4550/4600 level. Trading strategies should remain bullish as there are currently no signs of a pullback. When the price drops to the 4400-4430 range, you should focus on buying. Tomorrow Friday, it is expected to break through 4450 points, with an additional target of 4500 points or higher. The key resistance levels to watch are 4530-4550, while the key support levels are 4440-4430.

Finally, I wish you a Merry Christmas and a prosperous 2026!