On Thursday (December 19), during the Asian market, spot Gold made a strong rebound after a sharp decline in the previous trading day, with the current gold price around $2612 per ounce, an intraday increase of $26. FXStreet Analyst Haresh Menghani published an analysis of gold price technical trends on Thursday.

Menghani wrote that on Thursday in the Asian market, gold prices rebounded from a one-month low, and it seems that a two-day downward trend has ended. Investors are now focused on US economic data—including the final value of third-quarter GDP and the usual weekly initial jobless claims—to seek short-term trading opportunities.

After this, the market's attention will turn to the US Personal Consumption Expenditures (PCE) Price Index, which will be released on Friday, a preferred inflation indicator of the Federal Reserve, that will influence the movements of the dollar and gold in the short term.

On Wednesday, the Federal Reserve cut interest rates as expected and predicted a smaller degree of policy easing by 2025. Federal Reserve Chairman Powell stated that the threshold for further rate cuts might be higher, which stimulated the dollar and US treasury yields to soar, causing spot gold to plummet over 2% to a one-month low.

Spot Gold closed on Wednesday down $60.36, a decrease of 2.28%, reported at $2585.54 per ounce, the lowest closing level since November 18.

The Latest Technical Analysis of Gold

Menghani pointed out that from a technical perspective, the closing price of gold yesterday was below the 100-day simple moving average (SMA), marking the first time since October 2023. Previously, gold prices also closed below the $2600 per ounce level, which was seen as a new trigger point by bearish traders. Additionally, the oscillation indicator on the daily chart has just begun to gain negative traction, indicating that the path of least resistance for gold prices remains downward.

Meanwhile, the rebound attempt of gold prices on Thursday stalled near $2618 per ounce, which is the 23.6% Fibonacci retracement level of the most recent decline since reaching a one-month high last week.

Menghani stated that the above area should now be a critical point; once this level is broken, a new round of short covering could push Gold prices towards the region of $2635 per ounce, which corresponds to the 38.2% Fibonacci level, and then further rise to the 50% Fibonacci retracement level (around the $2655-2656 per ounce resistance area).

(Spot gold daily chart source: FXStreet)

On the other hand, Menghani added that the low point during the Asian session on Thursday (around $2584-2583 per ounce) currently seems to limit the recent downside potential for Gold prices. The next important Resistance is around $2560 per ounce; if this area is broken, Gold prices could challenge the volatility low of November (around $2537-2535 per ounce).

If Gold prices encounter some follow-up selling, leading to a subsequent break below the psychological level of $2500 per ounce, it may target the very important 200-day moving average Support near $2470 per ounce.

As of 11:41 Beijing time, spot Gold is quoted at $2611.77 per ounce.