Gold Trading Strategy for Next Week:

Trading Strategy Report on Gold Price Movement for December 8th

Core Summary: This week, gold prices exhibited intense volatility, influenced by a confluence of multiple factors, with sensitive market sentiment leading to significantly amplified price swings. The current price is fluctuating repeatedly within a critical range, as the market focuses on the upcoming Federal Reserve interest rate decision for clearer directional cues.

I. Review of This Week's Market and Driving Factors

Price Action Overview

The week began with a rapid surge to $4,262 (the weekly high), followed by a swift pullback to $4,225.

Selling pressure intensified during Asian and European trading hours, pushing the gold price down to a low of $4,170 (the weekly low).

Extreme volatility occurred on Tuesday: a sharp rise of nearly $250 within 15 minutes, followed by a steep plunge triggered by profit-taking, reflecting deep market sensitivity and thin liquidity ahead of major events.

Prices surged again to $4,254 on Thursday, but concentrated selling after the North American market open led to a drop of over $50 within minutes.

Prices ultimately settled below $4,200 on Friday, approaching a crucial support zone.

Primary Influencing Factors

Trading Sentiment and Liquidity: Reduced year-end liquidity amplified price movements, and concentrated buy/sell orders triggered sharp fluctuations.

Fed Policy Expectations: Markets price in a high probability (87%) of a December rate cut, but disagreement exists regarding the cumulative extent of cuts (1-3 times) through 2026, with this uncertainty curbing aggressive bullish positions.

Key Event Preview: Significant internal divergence exists within the Fed regarding rate cuts (5 out of 12 members opposing or expressing doubts). The key driver will be Chair Powell's characterization of the move as "insurance cuts" versus the "start of an easing cycle."

Technical Level Contention: Gold failed in three attempts to sustain above $4,220, leading to a shift in market confidence and ongoing high-level tug-of-war.

II. Technical Analysis

Key Levels

Resistance Zones:

First Resistance: $4,220 - $4,230 (short-term trendline pressure)

Core Resistance: $4,255 - $4,260 (recent highs; maintain bearish view unless breached)

Support Zones:

First Support: $4,160 - $4,165 (ten-day moving average & key structural support)

Breakdown Support: $4,000 (potential test target if hawkish signals emerge)

Chart Patterns & Structure

Triangle Consolidation: Currently in a small triangular consolidation pattern. Watch for two potential developments:

Pennant continuation pattern (trend resumption)

Broad range-bound consolidation pattern (continued sideways movement)

Trendline Focus: A breach of the rising trendline could trigger bearish momentum; conversely, holding support suggests continued choppy pull-ups.

Bull-Bear Line

Short-term Pivot: $4,200. Holding effectively above suggests a bias toward a rebound; trading below indicates continued pressure.

III. Trading Strategy for the Coming Week

Overall Approach

Primary Strategy: Favor selling on rallies, with buying on dips as a secondary approach.

Core Logic: Market sentiment is cautious ahead of the Fed decision, with high volatility and price swings expected. Await key levels for high-probability entry opportunities.

Specific Tactics

Short Strategy (Sell on Strength)

Entry Zone: $4,220 - $4,230

Stop-Loss: Set at $4,230 - $4,240 (8-10 points)

Target Levels:

First Target: $4,200 - $4,180

Second Target: $4,160 (hold if breached)

Long Strategy (Buy on Weakness)

Entry Zone: $4,160 - $4,165

Stop-Loss: Set at $4,150 - $4,155 (8-10 points)

Target Levels:

First Target: $4,190 - $4,210

Second Target: $4,220 (hold if broken)

Risk Management Essentials

Position Sizing: Initiate with light positions; avoid heavy, concentrated bets.

Strict Stop-Losses: Every trade must have a stop-loss; do not average down on losses.

Event Avoidance: Liquidity may be abnormal around the Fed announcement. Consider reducing operations or scaling down position sizes.

IV. Key Events and Outlook

Focus Next Week: Federal Reserve Interest Rate Decision (December)

Watch Point 1: Number of dissenting votes (≥3 would indicate deepening internal division).

Watch Point 2: Tone of Chair Powell's press conference—distinguishing between "insurance cuts" and the "start of an easing cycle."

Scenario Analysis:

Dovish Signal: Clearer path for rate cuts → Gold may resume its upward trajectory, targeting $4,300+.

Hawkish Signal: Downplaying rate cut expectations → Gold could decline to test the $4,000 region for support.

Medium-Term Outlook

Conditions for Upside: Fed confirms an easing cycle + tame inflation data → Gold is expected to break out of the high consolidation range.

Downside Risks: Hawkish Fed decision + tightening liquidity + intensified profit-taking → Potential for a deeper correction towards $4,000 - $4,100.