December 30 Gold Price Movement Observation: Focus on Selling High and Buying Low

Yesterday, gold experienced a rollercoaster—opening at 4538.33, reaching a high of 4550.19, then starting to decline, with the lowest dipping to 4300.58, and finally closing at 4325.22. The daily chart shows a strong bearish candle, indicating a clear sign of correction.

Why did it fall so sharply? Several reasons stacked together:

First, US real estate data improved. Pending home sales in November increased by 3.3% month-on-month and 2.6% year-on-year, hitting a new high since February 2023. The housing market's activity rose, increasing the attractiveness of risk assets, which naturally dims the safe-haven appeal of gold.

Second, the rate cut expectations have been pushed further back. According to CME FedWatch Tool, the probability of maintaining interest rates in January next year is 83.9%, and the chance of a cumulative 25 basis point cut by March is only 45.4%. With rate cuts seemingly out of reach, upward pressure on gold prices is understandable.

Third, long-term capital is exiting. The world's largest gold ETF holdings increased to 1071.99 tons, suggesting demand still exists, but profit-taking by speculative funds is accelerating—this is the main driver of short-term downward pressure.

Technical outlook? After breaking support, gold stabilized at the 20-day moving average, RSI pulled back from overbought levels, and a topping signal is strengthening. Looking downward, the 60-day moving average has already been broken, with moving averages in a bearish alignment, and RSI entering oversold territory. There may be a short-term technical rebound, but overall, the bias remains bearish. The 144-day moving average is below, with crossovers and divergence, indicating downward momentum has not fully released; watch for the recovery after oversold conditions.

Intraday strategy (focus on selling high and participating at low levels):

Long entries:
Aggressive traders: buy on pullbacks
Conservative traders: buy in batches around 4310-4340, with stop-loss at 4300
Target range: 4350-4380

Short ideas:
Aggressive traders: enter around 4383, with a stop-loss of 3-5 points
Targets are: 4330, 4310, 4300, 4280

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