Gold market analysis

"Gold Prices Form Double Top, Short-Term Selling Pressure Increases" 16/12/2025 10:32 Finalized 

Yesterday, the gold price indeed formed a double top pattern on the hourly chart. As the European midday approached, the spot gold price reached a high of $4,350.23 and closed with a bearish candle. The subsequent rebound only reached $4,348.31 before a rapid correction began. The price dropped to $4,285.48 at the close of the London market before rebounding. However, this morning's high of $4,318 failed to reach the top of the large bearish candle at the close of the London market, which was $4,318.92. 

Although the gold price has been fluctuating at a high level, it has remained above $4,300, indicating that the upward trend of the gold price has entered a new stage. In the short term, the risks to consider are that the gold price has broken below the 20SMA (4322.3) on the hourly chart and has closed below the 50SMA (4310.8) for several hours, and has not been able to recover the top of the large bearish candle formed at the close of the London market yesterday. Secondly, the US Department of Labor will release the November non-farm payroll report tonight. Currently, the market predicts that the increase in non-farm payroll positions will be between 40,000 and 50,000, which is far less than the new positions added in September. However, the risk is that the number of jobs "increases" rather than "decreases". If the market's focus is on the direction of US interest rates, this is undoubtedly a bad data. But if the focus is on the fundamentals, the fact that the number of jobs continues to increase should not be regarded as a poor data. 

Another more important factor is that for Americans, Thanksgiving is more significant than New Year's Day. November retail sales should be relatively good. As such, the market has an excuse to push up the US dollar exchange rate and sell off non-US currencies and gold. However, I would like to emphasize that this is a risk consideration and not a bearish view on gold prices. But it is expected that gold prices will be more volatile today! 

In the short term, I am more concerned about the impact of the double top formation on the gold price in the hourly chart, and it seems that it has already broken through the 20 and 50-hour SMAs, facing the risk of further decline within the day. From the perspective of the double top pattern, $4,285.48 can be regarded as the neckline. Therefore, if it is broken, the measured decline target is $4,217.26. On the other hand, if the Fibonacci extension line is used to measure the movement since yesterday, if the amplitude reaches 100%, the gold price will fall to $4,253.25, slightly lower than the top of the previous large horizontal range in the hourly chart at $4,264.68, as well as the low point made at the close of the London market last Friday at $4,257.34. For the time being, it is judged that the risk of further decline in the gold price is relatively high. It is expected that the 20-hour SMA ($4,322.4) will be the first important resistance for a rebound. Only after breaking through and holding above it can it be expected to challenge the double top resistance. 

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