On Monday (December 16th), in the morning session of the Asian market, spot gold fluctuated narrowly and is currently trading around $2652.87 per ounce. Although the market generally expects the Federal Reserve to cut interest rates this week, due to relatively strong US economic data, the market expects that the Fed's interest rate cut this week may release hawkish signals, which helped US bond yields rise to a nearly three week high last week, and gold prices fell to around the 2650 level last week. In the short term, gold prices tend to fluctuate downward.

The main advantages of the fundamentals are

The interest rate cutting cycle of global central banks:

Among the major central banks that held policy meetings last week, the European Central Bank cut interest rates by 25 basis points, the Canadian and Swiss central banks cut interest rates by 50 basis points, and the Reserve Bank of Australia, while maintaining its overnight lending rate, also abandoned its hawkish stance and released signals of possible policy easing.

Traders now believe that there is a 97% chance that the Federal Reserve will cut interest rates by 25 basis points at its meeting on December 17-18.

The data released by major Asian countries on Monday showed that the total retail sales of consumer goods in November were lower than expected, indicating that more aggressive stimulus policies may be needed.

Russia-Ukraine conflict continues

On the 15th local time, the Russian Ministry of Defense reported that from the night of the 14th to the early morning of the 15th, the Russian air defense system shot down a total of 15 Ukrainian drones in multiple locations, including 13 over the Black Sea waters and 1 over each of the Kursk and Belgorod regions.

On the 15th, the Ukrainian Air Force announced that from the night of the 14th to the early morning of the 15th, the Russian military launched one S-300 anti-aircraft missile and 108 attack drones towards Ukraine. As of 8:30 am on the 15th, the Ukrainian military has confirmed the shooting down of 56 drones. The falling drone debris caused damage to buildings, vehicles, and other structures in some areas of Ukraine.

The Israeli Palestinian conflict continues

On December 15th, the Israeli army attacked a school in northern Gaza that housed displaced persons, resulting in 15 deaths.

Syrian chaos

According to the UK based Syrian Observatory for Human Rights, Israel launched dozens of airstrikes on the outskirts of the Syrian capital Damascus from the night of the 13th to the morning of the 14th, targeting a research center in the north of Damascus.

The main bearish fundamentals

Israel and Hamas are expected to reach an agreement on the exchange of detained individuals by the end of this month

According to media reports, the exchange agreement between Israel and Hamas for detained individuals is likely to be completed before the evening of December 25th.

But according to Israeli media, negotiations are currently deadlocked due to the number of personnel released in some agreements. The number of personnel released by Hamas is far below Israel's demands, and Israel is unwilling to make concessions.

The Federal Reserve may cut interest rates hawkishly this week

Although the inflation and labor market data released by the United States last week did not reverse the expectation of the Federal Reserve cutting interest rates next week, the market believes that the Fed's stance may be slightly hawkish, sending a signal to pause interest rate cuts in January to assess the inflation outlook and the resilience of the labor market.

According to CME's FedWatch tool, the market fully expects the Federal Reserve to cut interest rates at its upcoming meeting, but the likelihood of another rate cut in January is only around 24%, and there may only be two rate cuts in 2025.

Strong expectations for US economic data

The US retail sales data, known as the 'terrifying data', will be released this Tuesday. The market expects US retail sales to rise by 0.5% month on month in November, and is expected to record the best performance in over six months.

This Friday, the US PCE data that the Federal Reserve is most concerned about will be released. The market expects the US PCE to increase by 2.5% year-on-year in November, compared to the previous value of 2.3%, and the core PCE to increase by 2.9% year-on-year, compared to the previous value of 2.8%.

Strong US Treasury yields: The 10-year US Treasury yield has risen for five consecutive days, reaching a nearly three week high of 4.411%, although the Asian market slightly fell to around 4.386% on Monday.

Fundamental summary: In the short term, the negative factors of fundamentals tend to outweigh the positive factors, and there is room for further fermentation. This week's decision by the Federal Reserve may lead to a growing wait-and-see sentiment.

Technical aspect

Daily level: oscillation, KDJ dead cross, MACD red bar shrinking, gold price above 2721 blocked and fell back, bears begin to control the situation, may further explore the support near the lower Bollinger Bands 2600.73, and the 100 day moving average support is also near this position.

But the gold price has fallen significantly in the past two trading days, and there may be a demand for short-term rebound adjustment. The resistance of the 10 day moving average above is around 2661.26, the resistance of the 55 day moving average is currently around 2666.58, and the resistance of the 5-day moving average is around 2678.82. If this position is unexpectedly recovered, it will weaken the bearish signal in the future.

4-hour level: fluctuating decline; After peaking around 2726, the gold price continued to decline and fell back into the previous oscillation range, with a pullback of over 61.8%. The Bollinger Bands opened and initially crossed the zero axis, and the market tends to move downwards along the Bollinger Bands in the future, which may further explore the support of the 2610 line below the previous oscillation range. In the short term, there is still some support around 2634.67 and 2627.51 respectively.

Due to the fact that the previous oscillation range is also a densely traded area, the possibility of quickly falling below this area is relatively small, and KDJ also has a golden cross trend. Short term attention should also be paid to the possibility of oscillation rebound adjustment. The initial resistance above is around the 200 moving average 2662.61, and the key resistance is around 2675.08. If it can rise above this level, it will weaken the bearish signal in the future.

Resistance: 2662.61; 2675.08； 2678.74； 2684.57； 2692.68；

Support: 2643.41; 2634.67； 2627.51； 2620.00； 2613.55.

Technical summary: The future market is bearish, pay attention to the rebound and adjustment strength in the short term.

Conclusion: The fundamental and technical aspects are bearish, and the gold price is facing further downside risks; But there is also a possibility of short-term fluctuations and adjustments.