Gold trading strategy on Friday, December 20

เมื่อวานซืน

U.S. Data Strengthens Market Expectations for the Federal Reserve's Cautious Approach to Policy Easing Next Year

Recent data has reinforced market expectations that the U.S. Federal Reserve (Fed) will adopt a cautious approach to policy easing in the coming year.

Earlier reports showed that the U.S. economy grew faster than expected in Q3 2024, while unemployment claims also saw a significant decline compared to forecasts.

The robust economy and inflation risks, including tariffs and spending cuts, reaffirm that the Fed has little reason to take aggressive action. This traditionally is not favorable for gold, a non-yielding asset.

Investors are awaiting the release of the core Personal Consumption Expenditures (PCE) data on December 20, the Fed's preferred inflation gauge, for further clues about the economic outlook. In today’s trading session, investors will focus on the crucial PCE inflation data, which will determine whether gold will recover strongly to the 2.63x - 2.65x region or drop deeper to the 2.55x - 2.53x range. The answer will be revealed later today, with a slight increase expected compared to the previous report.

For now, it is advisable to consider buying in the Asian and European sessions first, with the PCE data to be considered later. Thus, the recommendation is to buy with targets at 2.605 - 2.607, 2.610 - 2.612, and possibly 2.615 - 2.617. Afterward, a sell position can be considered on a pullback with a target of 5-10 points.

In the European session, if gold continues to trade around 2.59x at the start of the European session, the buy strategy remains valid. However, if gold falls and closes a candle at 2.58x, the situation should be reconsidered. At that point, a sell position may be initiated earlier with a target of 5-10 points.

Trading Plan:

BUY ZONE: 2591 - 2589

SL: 2585
TP1: 2600
TP2: 2605
SELL ZONE: 2621 - 2623

SL: 2627
TP1: 2610
TP2: 2600
Gold is rebounding quickly after China’s decision to maintain interest rates, following the Fed’s signals that rate cuts may be less aggressive.

=> There is a possibility of further gains, but it is not recommended to chase buys. Waiting for a light pullback would be a more prudent strategy.