Gold market analysis

"Gold Price Weak, Beware of Breaking Below 20-Day Moving Average" 31/12/2025 10:33 Completed 

Yesterday, gold prices held steady above the 20-day SMA on the daily chart (currently around 4336) as expected and then rebounded. However, the rebound was less than 50% of the previous day's range, peaking at 4404.5 dollars before losing momentum and eventually falling sharply to close at 4365.5 dollars. This morning in the early Asian session, gold prices rose again, reaching a high of 4373.34 dollars so far. Technically, gold prices remain above the 20-day SMA on the daily chart. To say that this is a rebound after a strong bearish signal is not entirely accurate. The reason is that I am merely making a judgment based on the candlestick signals and not expressing a personal opinion. 

However, many investors habitually come up with a hundred thousand reasons to deny the bearish reversal pattern of the candlestick chart last Friday, justifying their continued purchase of gold. This is really unnecessary. Even if I admit that I am going against the market trend, so what? At least I know it's a contrarian move and will be fully prepared for the stop-loss risk. But if you constantly deny the market's signals, you might be denying yourself as a long-term "consumer" of the financial market! 

Today is the last trading day of 2025. Market conditions could be extremely volatile or very dull. Regarding the trend of gold prices, only a breakthrough above last Friday's high will offer a chance for the upward trend to continue. Investors should note that the movement of gold prices since last Friday is similar to that after the sharp drop on October 21. Therefore, it is necessary to be cautious of a further test of the lower limit after consolidation at the lower limit of last Friday's range. Although gold prices remain above the 20-day simple moving average on the daily chart, if they continue to closely follow this line, it indicates weak rebound strength and a higher possibility of a rapid downward break below this line. 

Yesterday, the rebound of gold prices only reached as high as $4,404.5, failing to break through the strong resistance level of $4,410 as per Gann's theory. This morning, it dropped to as low as $4,328.76 and then rebounded continuously, rising to a high of $4,373.34, approaching the 61.8% retracement of the biggest decline since yesterday's New York session at $4,375.41. It then fell back to around $4,360 and has been consolidating. Currently, it is more certain that $4,410 and $4,426 have become short-term strong resistance levels for gold prices, while the 20-day SMA and $4,310 are strong support levels. Based on personal experience, short-term trading with 1-minute and 5-minute charts in conjunction with moving averages has a higher probability of success and lower risk. 

The above content is for reference only and does not constitute investment advice.