On Monday (December 23) morning trading in the Asian market, spot gold fluctuated narrowly and is currently trading around $2622.13 per ounce. Gold prices surged nearly $30 last Friday, supported by the weakening of the US dollar and US Treasury yields. Previously, US economic data showed a slowdown in inflation, but the hawkish interest rate outlook of the Federal Reserve has put gold prices on track for a weekly decline. In addition, several Fed officials have expressed support for slowing down interest rate cuts next year, which still makes gold bulls hesitant.

Despite the increase in consumer spending in the United States in November, the strong demand for various goods and services highlights the resilience of the economy. The Bureau of Economic Analysis of the US Department of Commerce stated that consumer spending increased by 0.4% in November, with an estimated growth of 0.5%. Adjusted for inflation, consumer spending increased by 0.3%. Personal income increased by 0.3%, of which wages increased by 0.6%. After deducting inflation factors, household disposable income increased by 0.2%. The savings rate has dropped to 4.4%. But the PCE price index increased by 0.1% month on month and 2.4% year-on-year. The core PCE price index rose by 0.1%, which is the smallest month on month increase since May. This indicator has increased by 2.8% year-on-year.

The US dollar fell 0.6% from its two-year high last Friday, closing at 107.81, the largest single day drop since December 5th, causing a decrease in the price of gold for overseas buyers. US Treasury yields also fell from their highs in over six months, with 10-year yields ordering 1.1% last Friday, the largest single day drop since November 29th.

ForexLive's Chief Monetary Analyst Adam Button said, "The latest inflation data is much milder than people were worried about; the Federal Reserve shifted its focus back to inflation at this week's meeting, and then the data became less worrying." I think the market heard the Fed's words and began to worry about inflation. But subsequent data shows that inflation is still slowing down and has certainly not reached worrying levels. "

Not only PCE data, but also personal income data and personal expenditure data are weaker than expected, "said Phillip Streible, Chief Market Strategist at Blue Line Futures." We see people returning to the gold market and rebuilding their positions

In addition, the uncertainty of Trump's policy prospects also provides support for gold prices, as the incoming Trump administration plans to cut taxes, impose or increase tariffs on imported goods, and deport millions of undocumented immigrants.

Given the significant rise in the US dollar, the overall trend of inflation decline over the next two months remains unchanged, "said Brian Bethune, an economics professor at Boston College." However, if the incoming government significantly increases tariffs, it will trigger retaliation and usher in a period of stagflation similar to the 1970s.

US President elect Trump said last Friday that the EU should strengthen imports of US oil and gas, otherwise the US will impose tariffs on EU exports of goods such as cars and machinery

According to data from the US government, the EU has already purchased the majority of the US oil and gas exports. The United States is exporting at full capacity and currently has no additional production available for export, but Trump has promised to further increase the country's oil and gas production.

The geopolitical situation still worries the market.

On the 22nd local time, the Israeli Defense Forces continued to launch attacks on multiple areas in the Gaza Strip. A spokesperson for the Gaza Strip Civil Defense Department stated that the Israeli Defense Forces' attacks from the night of the 21st to the 22nd have resulted in the deaths of at least 28 Palestinians, including 4 children.

On the 22nd local time, the Russian Ministry of Defense reported that the Russian military had taken control of two settlements in the past day, striking Ukrainian military airport infrastructure, drone factories, foreign mercenary assembly sites, and intercepting Ukrainian missiles, rockets, and 100 drones.

Two insiders revealed that the Biden administration will announce the final batch of Ukraine's security assistance plan in the coming days, spending the remaining funds reserved for Ukraine to purchase new weapons. The third person stated that the plan includes an air defense interception system and artillery shells, but the specific details will not be known until the plan is announced in the coming days. They stated that the aid scale of the program is about 1.2 billion US dollars.

However, the latest speech by Federal Reserve officials tends to support a slower pace of interest rate cuts in the future and tends to suppress gold prices.

New York Fed President Williams said last Friday that he expects to implement more interest rate cuts, but he pointed out that interest rate cuts will be driven by new data as policies continue to suppress economic momentum. Even with this week's interest rate cut, he still believes that 'our monetary policy is highly restrictive', which means that short-term interest rates are still suppressing the economy and should help further alleviate inflationary pressures. As for the next direction of monetary policy, the baseline trajectory is to move towards a lower neutral interest rate.

San Francisco Fed President Daley said that the Fed's decision to cut interest rates by another 25 basis points is a "difficult decision," and added that she agrees with Powell's view that further policy adjustments need to be approached with caution now.

Cleveland Fed President Hamack said she opposes this week's interest rate cut decision because the strength of the economy and the inflation outlook do not support policy easing. She said that as monetary policy is "not far" from a neutral stance, she hopes that monetary policy will remain stable "until we see further evidence that inflation is returning to the path towards our 2% target".

Chicago Fed President Goolsby said he now expects the path of interest rate cuts in 2025 to be shallower than previously anticipated, but added that he still believes the Fed's policy rate will have a "wise magnitude" decline next year.

FXStreet senior analyst Joseph Trevisani said, "Before and after Wednesday's Federal Reserve meeting, it was basically an interest rate game. It's not that they did anything, but the catalyst is a change in economic forecasts for next year's federal funds rate. The market sees that the Fed is pulling back. I've always thought they would pause rate hikes in January. I'm pretty sure they will do that

According to LSEG data, the market currently believes that the earliest possible interest rate cut is at the May meeting, with a probability of 62%. The expectation last Thursday was to cut interest rates as early as June, with a probability of 65%.

The market may be relatively light this week as it will usher in the Christmas holiday in European and American countries, and most overseas markets will be closed. Economic data is also relatively scarce, which may limit trading interest. This trading day, we need to pay attention to the consumer confidence index and geographical situation of the Conference Board in December.