Gold's recent pullback certainly has some technique to it. It looks simple on the surface, but three forces are working simultaneously: long-position traders are taking profits, passive selling from index weight adjustments, and the dollar index's cyclical rebound. However, this doesn't mean gold prices are about to collapse, because the support on the other side is quite solid—expectations for a potential Fed rate cut in March are heating up, safe-haven demand from geopolitical risks hasn't subsided, and central banks worldwide continue to accumulate gold.
From a trading logic perspective, the market's bet on Fed actions is becoming increasingly heavy. Once real interest rates decline, the opportunity cost of holding gold gets depressed, and this can directly drive gold price valuation higher. Combined with ongoing uncertainties in many parts of the world and central banks busy stockpiling gold, most investors now view this pullback as a buying opportunity.
What happens next depends on the non-farm payroll data:
**If non-farm payrolls significantly miss expectations**, rate-cut expectations will further heat up, the dollar will weaken under pressure, and gold prices could quickly bounce back to previous high areas.
**If the data basically meets expectations**, bulls and bears will enter a stalemate, with gold prices likely oscillating between 4400 and 4500, waiting for CPI data and Fed meetings to provide clearer signals.
**If data unexpectedly comes in strong**, rate-cut bets will cool significantly, the dollar will conversely strengthen, and gold prices may test the key support at 4350, which will test whether the medium-term trend can hold.
**Operating strategy reference**: Build long positions in batches with light positions in the 4400-4419 range, with risk control set below 4385, first target around the 4450 resistance level. If it can't break through 4450, consider reversing to short.
January 8 Gold Midday Watch
Gold's recent pullback certainly has some technique to it. It looks simple on the surface, but three forces are working simultaneously: long-position traders are taking profits, passive selling from index weight adjustments, and the dollar index's cyclical rebound. However, this doesn't mean gold prices are about to collapse, because the support on the other side is quite solid—expectations for a potential Fed rate cut in March are heating up, safe-haven demand from geopolitical risks hasn't subsided, and central banks worldwide continue to accumulate gold.
From a trading logic perspective, the market's bet on Fed actions is becoming increasingly heavy. Once real interest rates decline, the opportunity cost of holding gold gets depressed, and this can directly drive gold price valuation higher. Combined with ongoing uncertainties in many parts of the world and central banks busy stockpiling gold, most investors now view this pullback as a buying opportunity.
What happens next depends on the non-farm payroll data:
**If non-farm payrolls significantly miss expectations**, rate-cut expectations will further heat up, the dollar will weaken under pressure, and gold prices could quickly bounce back to previous high areas.
**If the data basically meets expectations**, bulls and bears will enter a stalemate, with gold prices likely oscillating between 4400 and 4500, waiting for CPI data and Fed meetings to provide clearer signals.
**If data unexpectedly comes in strong**, rate-cut bets will cool significantly, the dollar will conversely strengthen, and gold prices may test the key support at 4350, which will test whether the medium-term trend can hold.
**Operating strategy reference**: Build long positions in batches with light positions in the 4400-4419 range, with risk control set below 4385, first target around the 4450 resistance level. If it can't break through 4450, consider reversing to short.