During its most recent rally, gold hit a peak of $4,264.39 on Monday but quickly closed lower at $4,231, showing strong selling pressure despite the metal’s impressive upward momentum last week driven by expectations of potential Fed rate cuts.

The rebound allowed gold to set a new 6-week high, but selling pressure returned immediately afterward, pulling the price down to $4,163.55 on December 2. Since then, gold has been stuck in a state of hesitation as the market wrestles between two opposing forces:

• Growing expectations of Fed rate cuts, especially after a series of weak U.S. economic data.

• Easing geopolitical tensions along with signals that the Bank of Japan (BOJ) may raise interest rates at its December 19 meeting, weakening expectations of a 25-basis-point Fed cut.

Central Banks Continue Buying Gold

• Poland: The world’s leader in purchases, buying a net 83 tons since the beginning of the year; 16 tons added in October alone, raising reserves to 531 tons (26%).

• Brazil: Bought 16 tons, marking the second consecutive month of increases.

• China: Continues its 12-month buying streak, adding 0.9 ton, reaching a total of 2,304 tons.

• Russia: The only country selling gold, reducing reserves by 3 tons.

Strong and persistent central-bank demand continues to provide long-term support for gold.

U.S. Factor: Economic Data Is Softening

Signs of a slowing U.S. economy continue to strengthen expectations that the Fed will need to ease policy. The market’s next major focus is the September PCE index the Fed’s preferred inflation gauge scheduled for release this Friday after being delayed due to the government shutdown.

If the Fed does not cut rates in its December 9–10 meeting, a sharp decline similar to October 2025 (–11.55%) remains a real possibility, with gold potentially revisiting the $3,900 support zone before the year ends.

Technical Outlook: Gold Under Heavy Pressure

I observe that gold is facing strong downward pressure around the $4,245–$4,265 resistance zone, showing signs of distribution and a high likelihood of forming a short-term top at $4,264.39.

Wave Structure Overview

• Gold is still moving within a corrective (a) – (b) – (c) wave structure (white).

• The (b) wave has likely completed at $4,264.39.

• Gold is now entering the downward leg from (b) toward (c).

• If the decline continues, the next targets may be the key support area around $4,140, and further down toward $4,110.

The current movement in gold indicates that the market is still in a necessary consolidation phase after a strong rally. This is not a sign of weakness, but rather a natural pause to absorb new expectations surrounding global monetary policy—especially as the Fed leans toward rate cuts while the BOJ signals a return to tightening.

Sideways phases often test investors’ patience, but from both a technical and liquidity perspective, they act as a foundation for the market to establish a more sustainable upward or downward trend in the next cycle. Instead of trying to predict the direction too early, the most rational strategy now is to take advantage of short-term fluctuations while closely monitoring key support–resistance zones.

Medium- and long-term investors should wait for clear confirmation from price movements and economic data, avoiding premature decisions when policy variables remain uncertain.

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