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In the past three months, gold prices have followed a stable upward trend line, repeatedly hitting new highs and successfully breaking through the $4,500 mark.
Currently, the market has not seen any significant declines that could reverse this upward trend, making this trend line an important technical reference for short-term gold price trends.
However, it should be noted that during the continuous rise and reaching new highs, the upward momentum has shown signs of gradually weakening, and a technical correction may occur in the near future. Although the price of gold has repeatedly reached historical highs in recent months, its fundamental advantage as a safe-haven asset remains strong. Gold remains one of the most popular safe-haven assets, and its demand is closely related to market confidence indicators.
The CNN Market Fear and Greed Index has shown a clear recovery in recent weeks, shifting from the fear zone to the greed zone, and is currently hovering around 58. However, as the end of 2025 approaches, the momentum of the index begins to slow down, and market sentiment enters a brief period of hesitation and expectation. As long as the Fear & Greed Index fails to stabilize and penetrate the main levels of the Fear & Greed zone, it indicates that overall market confidence remains neutral, and this sentiment environment will support demand for safe-haven assets such as gold. If the index fails to sustain its upward trend, gold will continue to be in demand as a safe-haven asset in subsequent sessions.
As the end of the year approaches, the Fed’s monetary policy trends continue to affect market sentiment, and everyone is paying attention to the direction of monetary policy in 2026. Current market prices show that the probability that the Federal Reserve will decide to maintain interest rates on January 28, 2026 is about 82.3%. However, ahead of the monetary policy meeting scheduled for March 18, 2026, the probability distribution of interest rate expectations has changed significantly: 46.7%, while the probability of a rate cut is 46.7%. 25 basis points higher to 45.6%. If this rate cut occurs, the Fed’s base interest rate may drop to 3.50%. This data shows that the market will still have large differences on the direction of the Federal Reserve’s monetary policy in 2026, and overall expectations will fluctuate. Uncertainty about the Fed’s policy has directly led to lower U.S. Treasury yields. U.S. Treasury yields have recently fallen from a peak of 4.2% and are currently hovering around 4.1%. The trend reinforced market expectations for lower short-term interest rates, weakening the appeal of dollar-denominated fixed-income assets.
Notably, U.S. Treasuries are considered one of the most important alternatives to gold. The continued decline in U.S. Treasury yields will reduce the value of its bond allocation, and market funds may reallocate investments to safe-haven assets such as gold.
This market backdrop provides continued support for gold demand, making it a more attractive asset allocation in the short term. As long as uncertainty surrounding Fed policy continues to weigh on U.S. Treasury yields, this fundamental positive factor will continue to dominate and become the main driver of continued buying of spot gold.
Gold technical analysis:
It hit an all-time high during the US trading session on Friday, hitting $4,549 before falling to $4,509. However, the price did not fall below the $4,500 level, indicating continued strength from buyers. Technically, the daily chart shows a strong bullish structure with the moving averages in full bullish mode. The price continues to trade near the upper band of the Bollinger Bands indicator. Under such a strong upward trend, it is unwise to blindly chase the rise; instead, it is recommended to wait for a pullback to establish a reasonable buying position. The key resistance level to watch is $4,550. If this trend continues, the next target could be the $4580-4600 range. However, if the price falls below this level, a bearish divergence could occur, leading to a pullback.
Based on Friday’s close, gains could extend on Monday. A pullback may provide a buying opportunity. However, be aware of possible market corrections on Tuesday and Wednesday due to the release of the Fed minutes, New Year’s Day, and the monthly and yearly chart closes.
From a trend perspective, although the gold price did not continue its upward momentum after reaching a new high, the overall trend is still bullish, showing a sideways and defensive pattern. It is currently fluctuating in the range of $4490-4550. Given the current pace, buying the dip remains the best strategy. The key resistance level to watch in the short term is $4550-4560, while the key support level is $4490-4500.
