On Tuesday, the spot gold price rose slightly, currently trading at $2,641.75 per ounce, with an intraday increase of 0.11%. Despite the limited increase, the support for safe-haven demand has led to the continuation of the overnight rebound from around $2,620 per ounce. However, the moderate strength of the US dollar and the rise in US bond yields have limited the upside potential for gold. Ahead of the release of key economic data and the Federal Reserve interest rate decision, the market sentiment appears cautious, with gold bulls temporarily unable to dominate.

Market Background and Influencing Factors

Recently, remarks by US President-elect Donald Trump on tariff policies have once again sparked concerns about escalating trade tensions, increasing the safe-haven appeal of gold. In addition, the escalating tensions in the Russia-Ukraine situation and the subdued US bond yields have also supported gold prices. However, the resurgence of the US dollar exchange rate has weakened the attractiveness of non-yielding asset gold.

It is widely expected in the market that the Federal Reserve may cut interest rates again this month. According to CME Group's FedWatch tool, investors believe that the probability of a 25 basis point rate cut at the December meeting is close to 75%. However, at the same time, the improvement in the ISM Manufacturing PMI index reflects a relatively robust performance of the US economy, possibly providing more support for the Fed to maintain higher interest rates, which puts some pressure on gold.

The current market focus is on the upcoming release of important economic data, including Friday's Non-Farm Payrolls (NFP) report and the latest speech by Federal Reserve Chair Powell, which will directly impact market expectations for future interest rate paths. Prior to this, the JOLTS Job Openings data later on Tuesday may provide short-term trading opportunities for the market, but is expected to have limited impact on the overall direction.

Technical analysis

From a technical analysis perspective, on Monday, the gold price broke below a four-day uptrend channel, which is a key signal for bearish traders. However, oscillators on the daily and four-hour charts are mixed, requiring investors to exercise caution when predicting further downward potential.

If the price of gold can break through the $2650 level, it may face resistance at last Friday's high of $2666. After further breakthrough, the next key resistance area is expected to be between $2677 and $2678, and if this level can be breached, gold may challenge the psychological barrier of $2700.

On the other hand, the overnight low of $2622-2621 forms a short-term support area, while the key support below is around the $2600 level and the $2597 area near the 100-day moving average. If these levels are broken, gold may further test the support in the $2536-2537 area, the low point of November.

Future Trend Outlook

Overall, spot gold is currently influenced by multiple factors, including geopolitical risks, Fed policy expectations, and the trend of the US dollar. In the short term, market sentiment may continue to be influenced by macroeconomic data and Fed decisions, during which time the price of gold may maintain a range-bound pattern. In the medium term, if the Fed hints at a more dovish policy stance, gold may regain momentum and test key resistance levels above; but if the US dollar continues to strengthen or risk sentiment improves, gold may face greater downward pressure.

Currently, traders should closely monitor the performance of US economic data and the statements of the Fed, while also being vigilant to the potential impact of further changes in the Russia-Ukraine situation on market risk sentiment. In the short term, whether key price levels are breached will be the main determining factor for the direction of gold.