In the theater of the global financial markets, the fluctuations of spot gold prices are a focal point of speculation and analysisRecently, the price of gold has exhibited noticeable volatility, primarily influenced by the latest Consumer Price Index (CPI) data from the United States and the prevailing expectations surrounding Federal Reserve policyThese elements have emerged as significant variables driving the current oscillatory trend in the gold market.

On December 11th, in the Asian market, spot gold experienced a series of dramatic price swingsEarlier in the day, it surged to a two-week high of $2704.22 per ounce before a rapid retraction occurred, causing it to retreat and find a lower trading range around $2692 per ounceThis sharp rise and fall encapsulated the tug-of-war between buyers and sellers, influenced by a variety of external factors.

From a fundamental standpoint, numerous elements interact to shape the price of gold

One of the most pressing factors is geopolitical tension, which acts like a weighty bomb offering robust support for gold pricesFurthermore, the anticipated global central bank interest rate cuts and the People's Bank of China’s (PBOC) increasing gold reserves may seem like supportive elements, though the long-term implications of rate cuts are largely anticipated and have been largely priced inAdditionally, news concerning the PBOC’s gold acquisitions has lost its novelty, limiting its effect on gold prices.

Nevertheless, market attention is increasingly drawn to the U.SCPI data from November and the broader economic outlook articulated by the Federal ReserveEconomists predict a 0.3% increase in both overall and core consumer prices, maintaining a year-on-year inflation rate of 3.3%. However, core inflation is expected to rise from 2.6% in October to 2.7% in November

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Analysts at HTFX caution that should this prediction hold true, there could be concerns within the market that the Federal Reserve may not be able to implement rate cuts as swiftly as hoped, subsequently bolstering the U.SdollarThe U.Sdollar index, having stabilized near the crucial support level of 105.41, has seen an increase for three consecutive trading days, signaling bullish trends and further suggesting potential downward pressure on gold prices.

Moreover, the yield on 10-year U.STreasury bonds has surged, closing above the critical 200-day moving average of 4.206%. This bullish sentiment in bond yields also exerts downward pressure on gold pricesDespite a prevailing expectation that the Federal Reserve will cut rates by 25 basis points in December—an expectation with an 85% probability reflected in the interest rate futures markets—more analysts are indicating that such a cut might veer towards a hawkish stance, with the expectation that any further cuts may pause in January

As reported following the latest employment data, a majority of economists surveyed foresee a 25 basis point cut in December, yet there are some who anticipate a more cautious approach with rates held steadyNearing January, almost 60% of the economists predict no changes, and the expected frequency of rate cuts throughout the coming year has markedly declinedSuch divergences in market expectations have ushered in a cloud of uncertainty over the gold market, exerting significant downward pressure on prices.

From a technical analysis perspective, prices currently reflect a landscape of oscillationAfter successfully breaking through the $2605 - $2666 zone, gold prices surged but faced resistance near the $2704 markThe emergence of bullish signals indicated by MACD and KDJ indicators suggests the potential to revisit the November 25 high near $2721, provided the price remains above the vital 55-day moving average of $2668. A failure to maintain above this moving average would weaken the bullish outlook, while significant support levels are indicated at the 5-day moving average of $2662.20, the 10-day at $2653.09, and the 21-day at $2638.12.

Similarly, on the four-hour chart, similar patterns emerge

After an upward breakout from the 2605 - 2666 range, gold rallies but encounters resistance close to $2704, hinting at a possible reversal pattern in Shaping for an initial bearish signalThe KDJ indicator shows signs of potential weakness from a high point, indicating risks tied to price retraction with preliminary support following at $2676.31 and significant moving average support at around $2668.08. If prices unexpectedly dip below these levels, bearish signals would intensify, but prior to any break of these support lines, there remains the possibility for bulls to attempt a rally, with a crucial resistance line forming near previous highs at around $2721.21. Only a definitive break of this resistance will sustain further upward momentum; otherwise, a retreat would be prudent to monitor.

In conclusion, spot gold finds itself mired in a complex environment characterized by a blend of bullish and bearish factors