On Tuesday, the price of spot gold rose slightly. Currently trading at $2641.75 per ounce, an intraday increase of 0.11%. Although the increase was limited, the price of gold continued its overnight rebound from around $2,620, supported by safe-haven demand. However, the moderate strengthening of the US dollar and the recovery in US bond yields have limited the room for gold prices to rise. Prior to the release of key economic data and the Federal Reserve's interest rate decision, the overall market sentiment was cautious, and gold bulls have yet to dominate.

Market background and influencing factors

Recently, US President-elect Donald Trump's tariff policy remarks have once again aroused market concerns about escalating trade frictions. This uncertainty has boosted the safe-haven appeal of gold. Furthermore, the escalating tension between Russia and Ukraine and the sluggish yield on US Treasury bonds have also supported the price of gold. However, the recovery in the US dollar exchange rate has weakened the appeal of gold as a non-yielding asset.

The market generally anticipates that the Fed may cut interest rates again this month. According to CME Group's FedWatch tool, investors believe that the probability that the Fed will cut interest rates by 25 basis points at the December meeting is close to 75%. However, at the same time, the improvement in the ISM manufacturing PMI index reflects the steady performance of the US economy, which may provide more support for the Federal Reserve to maintain higher interest rates, which has put some pressure on gold.

The current market's focus is on key economic data to be released, including Friday's Non-Farm Payroll Report (NFP) and Federal Reserve Chairman Powell's latest speech, which will directly affect market expectations for future interest rate paths. Prior to that, the JOLTS job vacancy data late Tuesday may provide short-term trading opportunities for the market, but the impact on the overall direction is expected to be limited.

Technical analysis

From a technical perspective, the price of gold fell below a four-day upward channel on Monday. This is a key sign for bearish traders. However, the performance of the oscillators on the daily line and the four-hour chart is uneven, which makes investors need to be cautious when predicting further downside.

If the price of gold can break through the $2,650 level, it may face the resistance area of last Friday's high of $2,666. After a further breakthrough, the next key resistance level is expected to be between $2677-$2678. If this level is overcome, the gold price is expected to challenge the $2,700 integer mark.

On the other hand, the overnight low of $2622-$2621 forms short-term support, while the key support below is at the $2,600 mark and the nearby $2,597 line (where the 100-day EMA is located). If it falls below these levels, the price of gold may further test the support in the November low of $2536-2537.

Future trend outlook

Taken together, spot gold is currently affected by a combination of factors, including geopolitical risks, the Federal Reserve's policy expectations, and the trend of the US dollar. In the short term, market sentiment may continue to be guided by macroeconomic data and the Federal Reserve's decisions, and the price of gold may maintain a range-bound fluctuation pattern during this period. In the medium term, if the Federal Reserve suggests a more dovish policy stance, the price of gold may regain momentum and test key resistance levels above; however, if the US dollar continues to strengthen or risk sentiment improves, the price of gold may face greater pullback pressure.

Currently, traders should pay close attention to the performance of US economic data and the Federal Reserve's statement, while being wary of the potential impact of further changes in the Russian-Ukrainian situation on risk aversion in the market. In the short term, whether the key price level is broken or not will be the main basis for determining the trend of gold.