Gold market analysis: new highs, strong momentum, and hidden worries

First: Main factors: policy uncertainty and funding transformation

In the past week, global gold prices rose by more than 4%, hitting record highs repeatedly. This growth is mainly due to two factors:

The Fed’s policy path is mixed: market expectations for the direction of interest rates in early 2026 have fluctuated, with futures prices indicating a 45.6% probability of an interest rate cut in March. Ongoing policy uncertainty is driving down U.S. Treasury yields (currently around 4.1%), reducing the appeal of fixed income assets and driving funds towards gold.

Safe-haven demand remains strong: Although the market fear and greed index has rebounded to 58, the recovery in sentiment has not yet stabilized. Until confidence is fully restored, demand for gold as an important safe-haven asset will continue to be supported.

Second: Technical Structure: Warning of Possible Downside in Strong Uptrend

Trend Pattern: The daily chart shows a complete bullish structure with the price steadily rising along the uptrend line and now above the $4,500 level.

Momentum signals:

The relative strength index (RSI) has entered overbought territory (>70), indicating that short-term purchasing power has been exhausted and the risk of a technical pullback is increasing.

The MACD red kinetic energy column is still above the zero line, and the mid-term upward trend remains unchanged, but attention should be paid to the possibility of continued amplification of trading volume.

Critical level:

Resistance levels: 4550-4560 (recent highs), 4580-4600 (psychological and technical resistance).

Support levels: 4490-4500 (short-term bullish/bearish breakthrough line), 4300 (previous high turns into support), 4200 (trend support line).

Third: Expectations and Strategies for the Week Ahead
Overall evaluation: Before the outlook for monetary policy becomes clear, gold’s overall upward trend is expected to continue, but it will face technical correction price pressure after continuing to rise. Next week marks the final week of the fiscal year and trading liquidity is likely to decline, which could increase volatility.

Transaction framework:

Key points of the strategy: Buy the dips and avoid chasing the highs.

Main scope:

The 4550-4560 area represents resistance; a strong breakout could represent a short selling opportunity.

The first level of support is at 4490-4500; a break above this level could represent a buying opportunity.

Risk warning: With the release of the minutes of the Federal Reserve meeting next week and the adjustment of positions at the end of the year, we need to be cautious about the possibility of a sudden decline. All trades must be executed using strict stop loss orders; avoid holding losing positions.

To learn about next week’s market dynamics and obtain more real-time strategies and entry and exit dynamics, please contact us!

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