January 8th Gold Lunchtime Observation

Recently, gold's pullback movements have been quite skillful. It looks simple, but in reality, three forces are acting simultaneously: traders taking profits, passive selling driven by index weight adjustments, and the stage rebound of the US dollar index. But this doesn't mean gold prices are about to collapse, because the support on the other side is quite solid—expectations of a Fed rate cut in March are heating up, geopolitical risks continue to drive safe-haven demand, and central banks around the world are still increasing their gold holdings.

From a trading logic perspective, the market's bets on the Fed's actions are becoming increasingly intense. Once real interest rates decline, the opportunity cost of holding gold is lowered, which can directly drive up gold's valuation. Plus, with some geopolitical situations still uncertain in many parts of the world, central banks are busy stockpiling gold. Most investors now see this pullback as a buying opportunity.

The next move depends on the non-farm payroll data:

**If non-farm payrolls fall significantly short of expectations**, then the rate cut expectations will need to heat up again, the US dollar will come under pressure and weaken, and gold prices are likely to rebound quickly back to previous high levels.

**If the data roughly meets expectations**, then bulls and bears will enter a stalemate, and gold prices are likely to oscillate between 4400 and 4500, waiting for CPI data and the Fed meeting to provide clearer signals.

**If the data unexpectedly shows strength**, the rate cut bets will cool significantly, the US dollar will strengthen, and gold may dip to the key support level of 4350, testing whether the medium-term trend can still hold.

**Operational reference**: Consider building long positions in batches within the 4400 to 4419 range, with risk control points set below 4385. The first target is to look towards the 4450 resistance level. If the price fails to break through 4450, consider reversing to short.