Last week (week 1202-1206), gold prices continued to be sideways, closing down 0.65% at $2633.02 per ounce. The entire week only fluctuated by $44, the narrowest fluctuation in nearly 15 weeks (since the week of August 30th). There is hope for a ceasefire in geopolitical conflicts, but intense conflicts have arisen in ceasefire agreement negotiations. The Federal Reserve has announced that it will not cut interest rates in December, but non farm markets have raised expectations of a Fed rate cut in December. These two key fundamental factors affecting gold are bouncing the ball, and the price of gold has not found a clear trading direction. The technical sorting range has not yet broken through.

Behind the seemingly boring market, a foundation is brewing for a new market. On the weekly chart, both spot gold and COMEX gold futures have formed a gestation line, further highlighting the lack of interest from bears, and the entire week has been a typical balance between long and short positions.

Technical analysis of spot gold weekly chart

From the daily chart, the gold price is also a sideways trend of yin and yang, and the price is still within the orange bold triangle consolidation pattern that we focused on last week.

Overall, it is expected that the volatility of gold prices will continue this week (week 1209-1213). Due to the formation of the pregnancy line implying that bears have no intention of making a push, this week the market is focusing on whether gold prices have become more sensitive to positive news, including weak data from the United States or positive news about gold in geopolitical conflicts. If there is positive news about gold and the gold price is sensitive, it will be a signal of bullish confidence rising. After all, December is a typical peak consumption season for gold, and in the past 10 years, gold prices have risen significantly in December for eight of them. However, the current gold price is indeed much higher than in previous years, and consumption may not be as strong as before, but it can still be considered a seasonal factor that benefits gold to some extent.

The key breakthrough window period for the gold market may be near the Federal Reserve's decision, which will take place on December 18th (3am on December 19th) in New York time. Prior to this, the decline in important US data continued to guide market expectations, and if the data remains weak, it will continue to push up expectations for the Federal Reserve's December interest rate cut. However, considering that Federal Reserve Chairman Powell has clearly stated that he is not in a hurry to cut interest rates, the expectation of a rate cut may not rise too high. This means that if gold prices rise sharply due to such expectations, they are still vulnerable to selling pressure.