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After gold prices fell sharply by more than $200 on Monday (December 29), spot gold prices rebounded strongly in Asia on Tuesday and are currently trading around $4,380, with an intraday high close to $50.
Gold attracted some buyers on Tuesday as safe-haven funds poured in, pushing prices above $4,350.
Previously, gold prices fell 4.5% in the previous trading day, the largest single-day decline since October last year, and then partially recovered. The Chicago Mercantile Exchange (CME) increased margin requirements for gold and silver futures contracts, leading to widespread profit-taking and portfolio adjustments. The Chicago Mercantile Exchange is one of the world’s largest commodity trading platforms.
Considering the possibility of the Federal Reserve cutting interest rates in 2026, the potential decline in gold prices may be limited.
Technically, gold maintains its upward trend, with the relative strength index (RSI) indicating that it may stabilize in the near term. Lower interest rates may reduce the opportunity cost of holding gold, supporting the non-yielding precious metal.
Additionally, ongoing global economic uncertainty and geopolitical tensions could boost traditional assets like gold. Trading volumes are expected to remain low ahead of the New Year holiday. Traders are closely awaiting the release of the Federal Open Market Committee (FOMC) meeting minutes later on Tuesday for new momentum in the market.
The Chicago Mercantile Exchange (CME) announced on its website on Friday that it was increasing margin requirements for gold, silver and other metals. The announcements require traders to allocate more capital to trades to hedge against default risk when contracts settle.
U.S. President Donald Trump said last week that he wants the next Federal Reserve to keep interest rates low and would never “disagree” with it. The announcement is likely to heighten concerns among investors and policymakers about the Fed’s independence. According to CME Group’s FedWatch tool, financial markets currently price a chance of a rate cut at the Fed’s next meeting in January at about 16.1%. Despite the volatility caused by the short-term decline, both gold and silver are close to posting their strongest gains of 2025 and on track for their best annual performance since 1979, underscoring the overall strength of the precious metals this year.
The minutes of the Federal Reserve’s December meeting will also be released today, and investors should pay attention. In addition, you should also pay attention to market news related to Federal Reserve Board nominees.
As far as today’s market is concerned, the 4300 mark is the 20-day moving average, indicating that it will rebound from the oversold area in the short term. However, a bearish engulfing pattern has formed on the daily chart. Looking at the four-hour chart, first of all, in a weak market, the 38.2% Fibonacci retracement level is the best entry point for shorting, which is near 4397, as well as the 38.2% Fibonacci retracement level in the 4550-4302 range, and the 10-day moving average. Secondly, the short-term moving averages MA5 and MA10 began to turn lower.
Upward resistance mainly focuses on the 4400 area, which is the previous high. Price has fallen below this area and subsequent rebounds should be monitored to see if this level creates sustainable resistance.
The overall strategy is still bearish, and it is recommended to look for short-selling opportunities during the rise.
The downside target remains near 4330 points.
If it falls below 4300, the price will target around 4220!
In short, the short-term trading strategy of gold is to mainly sell at high levels and buy at low levels as a supplement. The key resistance levels to watch are 4400-4390, while the key support levels are 4300-4280. Follow us to learn more.
