Technical analysis by dgfacpe about Symbol PAXG on 12/12/2025

On Friday (December 12th) during the European session, spot gold traded in a narrow range, currently hovering around $4330. The market continued its trading theme driven by expectations of further easing following the Fed's policy decision. The dollar index rebounded slightly after hitting a seven-week low of 98.13 on Thursday, but its overall weakness remained unchanged. The most important event this week was undoubtedly the Fed's interest rate decision and its subsequent guidance. The Fed announced a 25 basis point rate cut on Wednesday, lowering the target range for the federal funds rate to 3.50% to 3.75%, a move in line with market expectations. However, market focus quickly shifted to the policy statement and Chairman Powell's press conference. The dot plot showed that policymakers expect the federal funds rate to fall to 3.4% by the end of 2026, implying only one rate cut opportunity next year. Despite this, Powell emphasized at the press conference that the US labor market faces significant downside risks, and the Fed does not want its policies to stifle job creation. This wording was interpreted by the market as a dovish signal, leading some traders to bet on two rate cuts next year, rather than the one suggested by the dot plot. This subtle divergence in policy expectations has provided significant support for the gold market. As a non-interest-bearing asset, the cost of holding gold is inversely related to interest rate levels. When the market expects interest rates to level off or even decline, gold's relative attractiveness increases. The Federal Reserve's continued easing cycle with inflation pressures still above its 2% target, ruling out a pause in rate cuts, has put pressure on the dollar and provided upward momentum for gold prices. The dollar index fell to a more than two-month low on Thursday, reflecting the market's repricing of the Fed's policy path. Although the dollar attempted to stabilize during Friday's Asian session, the overall trend remained weak, creating a favorable exchange rate environment for dollar-denominated gold. In addition to monetary policy factors, geopolitical risk premiums are also an important variable supporting gold's performance. Next week's US non-farm payroll data will also be an important market driver. Powell's emphasis on labor market risks means that marginal changes in employment data could significantly impact policy expectations. If employment data unexpectedly weakens, market bets on interest rate cuts may intensify, which would benefit gold. Conversely, if employment remains resilient, the dollar may gain a breather, and gold prices will face some downward pressure. From a longer-term perspective, gold's dual attributes as an inflation hedge and safe-haven asset give it unique allocation value in the current complex macroeconomic environment. Global central bank gold purchases remain active, and the increase in gold reserves by central banks reflects a reassessment of long-term confidence in the fiat currency system. This structural demand change provides solid bottom support for gold prices and is an important reason for market optimism in the face of short-term volatility. Gold Price Trend Analysis: Gold's recent price movement is completely consistent with my analysis. This week, I have consistently emphasized buying on dips, and have repeatedly provided strategies and real-time notifications for placing long positions at lower levels. I believe those who follow me have seen this. I particularly emphasized that gold is stabilizing above 4260, accumulating strength, and awaiting a rally. Why didn't you see that? Our long position at 4265 was closed with a profit again, and the price ultimately surged as expected, breaking through 4310. We've achieved two consecutive wins for gold long positions today! Gold has been soaring recently, but a drop is inevitable. It's not far from our target of 4340, so we sold directly at 4340. We'll test the top first, and today is Black Friday, with support levels at 4260, or even around 4230. Such a strong upward move in gold requires caution. We don't support chasing the highs and lows. In short, we expect a pullback below 4260. Overall, our short-term trading strategy for gold today is primarily to sell on rallies, with buying on dips as a secondary approach. The key resistance level to watch in the short term is 4320-4330, and the key support level is 4250-4260. Please follow our recommendations closely.As I said, a continuous rise in gold prices is inevitably followed by a sharp fall! Friends, this is based on over ten years of trading experience!