On Tuesday morning (December 10th) in the Asian market, spot gold fluctuated narrowly and is currently trading around $2660.70 per ounce, holding most of the overnight gains. The gold price hit a two-week high of $2676.31 per ounce on Monday, climbing more than 1% to close at $2660.09 per ounce, as the People's Bank of China repurchased gold after a six-month hiatus, and expectations of the Federal Reserve cutting interest rates next week increased bullish sentiment. The geopolitical situation also boosted safe haven buying demand.

Bart Melek, head of bulk commodity strategy at Daming Securities, said: "The most important factor is the news that the People's Bank of China reported that it resumed buying gold again... The market is hopeful that we may see other central banks follow suit, and we may see a record resumption of buying."

China's resumption of purchases may support the demand of investors in the country. In 2023, China will be the world's largest official gold buyer, but the People's Bank of China will suspend purchases for 18 consecutive months in May.

The strong buying by the central bank is also the main supporting factor for this year's record breaking rise in gold prices. Another factor to consider is the prospect of monetary easing by global central banks.

The Federal Reserve cut interest rates by an unusually large 50 basis points in September, opening its interest rate easing cycle, and then cut interest rates by 25 basis points in November. Traders believe that there is an 86% chance that the Federal Reserve will cut interest rates by another 25 basis points at its meeting on December 17-18.

Trump's victory means that the eurozone may face tariff measures, adding new troubles to the economy. The governments of heavyweight powers Germany and France have collapsed one after another, and France has fallen into its second political crisis in six months. All of this has shaken confidence in the eurozone, where business activity is deteriorating and the euro has already fallen. The European Central Bank is facing difficulties as usual, and the market expects the bank to cut interest rates for the fourth time by 25 basis points on Thursday, and is expected to continue cutting interest rates in the future.

The Swiss National Bank and the Bank of Canada are also expected to cut interest rates again this week. The Swiss National Bank is highly likely to cut interest rates by 50 basis points on Thursday, while the market's view on Canada's meeting on December 11 (Wednesday) will cut interest rates by 25 basis points or even 50 basis points is evenly divided.

The central bank's interest rate cut means a decrease in the opportunity cost of holding gold, which tends to increase the attractiveness of gold.

In addition, the Syrian conflict has also increased the safe haven demand for gold.

On the night of the 9th local time, Hezbollah in Lebanon issued a statement condemning Israel's attacks on Syria. The statement stated that Israel's further occupation of the Golan Heights and attacks on Syria's defense capabilities are a serious violation of Syria's sovereignty and will further undermine Syria's stability. The statement accuses Israel of fabricating false reasons for its attacks and calls on the international community, especially the Arab world, to take a unified stance and exert pressure in various fields to stop Israel's aggression.

On the early morning of the 10th local time, the Syrian Observatory for Human Rights announced that Israel had launched about 250 attacks on Syria in less than 48 hours, damaging Syria's most important military facilities. According to reports, military facilities in most provinces of Syria have been attacked, with a large number of airports, weapons and ammunition depots, air force fighter jets, naval vessels, military radar stations, and research facilities destroyed. Syria's air defense system has been completely paralyzed. Previously, according to Arabia Television, Israel had launched over 100 attacks on Syrian military bases in the past 24 hours.

Of course, investors also need to pay attention to the development of the Russia Ukraine situation.

On the 9th local time, the Russian Ministry of Defense reported that the Russian military had launched attacks on Ukrainian military airport infrastructure, railway facilities for transporting military equipment, unmanned aerial vehicle assembly plants, and other targets in the past day. Russian air defense forces shot down multiple Ukrainian rockets and dozens of drones. In addition, the Russian military continues to strike Ukrainian personnel and equipment in the Kursk Oblast of Russia.

On the same day, the General Staff of the Ukrainian Armed Forces issued a war report stating that as of the afternoon of the 9th, the Ukrainian army had engaged in over a hundred battles with the Russian army in Kharkiv, Pokrovsk, Kulahovo and other directions. The Ukrainian army continued to hold their ground and repelled multiple attacks from the Russian army.

On December 9th local time, Nikiforov, the press secretary of the Ukrainian President, stated that Ukraine plans to hold a contact group meeting in December to discuss a common position on ending the war through diplomatic means. Nikiforov said that the list of the contact group is still being formulated. Ukrainian President Zelensky stated on the 8th that the members of the contact group may include Germany, France, the United Kingdom, Italy, Poland, Denmark, and other countries.

It should be noted that the overnight US dollar index and US Treasury yields have slightly increased, which still concerns gold bulls. Gold prices are still in a volatile range for the past two weeks, and may continue to fluctuate until the US CPI data is released on Wednesday.

Although the market already believes that a 25 basis point rate cut by the Federal Reserve next week is almost certain, investors are still waiting for Wednesday's US consumer price data, with the US dollar rising slightly in cautious trading on Monday.

Michael Brown, Senior Research Strategist at Pepperstone, said, "We saw the unemployment rate rise in November, which reinforces the reason for a 25 basis point rate cut next Wednesday

Last Friday's data showed that the US job market grew rapidly in November, but the unemployment rate rose to 4.2%, indicating a loosening of the labor market, which should prompt the Federal Reserve to cut interest rates again this month.

The US dollar index rose 0.179% on Monday, closing at 106.16.

Vishnu Varathan, a strategist at Mizuho Bank, pointed out that a series of geopolitical developments, such as the weekend resignation of Syrian President Bashar al Assad and transactions related to macroeconomic factors and President elect Trump, have provided further impetus for the market to continue to long the US dollar. He said, "There is no incentive to short the US dollar against any specific currency

Federal Reserve officials, including Chairman Powell, have stated that the recent increase in personal consumption expenditure data favored by the Fed reflects a bumpy road towards the 2% annual inflation target, but has not changed the overall trend.

Vail Hartman, a US interest rate strategist at BMO Capital Markets in New York, said, "If we see a convincing uptrend and the Fed cannot continue to use the bumpy terrain as an excuse, then it will raise doubts about whether the Fed can cut interest rates next week

Hartman said that the increase in core consumer prices to a relatively high 0.4% may raise concerns about a rate cut next week, but the expected rate will still depend on producer prices.

Economists expect that the consumer prices released on Wednesday will show a 0.3% increase in both overall and core prices in November, with annual increases of 2.7% and 3.3%, respectively. I

The producer prices released on Thursday are expected to show a monthly increase of 0.2% for both overall and core prices in November, with annual increases of 2.6% and 3.2%, respectively.

The next release of PCE data will be on December 20th.

The 10-year yield rose 4.2 basis points on Monday to 4.195%. The two-year yield, which is sensitive to interest rates, rose 2.6 basis points on Monday to 4.124%.

This trading day will also see the Reserve Bank of Australia's interest rate decision, and investors need to pay attention.

In terms of technical aspects, pay attention to whether the gold price can remain above the 55 day moving average of 2666.95. If it closes above this level, it is expected to initiate a new round of upward trend. Otherwise, it is still necessary to guard against the risk of gold price fluctuations and declines.