Fundamentals: Three Major Bullish Drivers Build a Safety Cushion

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1. Escalating Geopolitical Risks
The Russia-Ukraine conflict and Israel-Palestine conflict remain unresolved. New geopolitical uncertainties have emerged between Israel and Iran, as well as India and Pakistan. Coupled with the volatility of US tariff policies, global risk aversion remains at a high level. Shipping security risks in the Strait of Hormuz persist, providing sustained safe-haven premium for gold and serving as a potential catalyst to break through key resistance levels.

2.Strengthened Expectations of Policy Easing
Divisions within the Federal Reserve have intensified. Governor Milan publicly advocated for a 50-basis-point rate cut in December. Data from the CME FedWatch Tool shows the probability of a December rate cut has risen to 67%. After the end of the US government shutdown, the upcoming economic data is likely to show weak signals, with private sector layoff data having already issued an early warning. The downward trend of real interest rates remains unchanged, reducing the holding cost of gold.

3.Strong Capital Support
The global central bank gold-buying spree continues. Amid the de-dollarization trend, central banks have robust demand for increasing gold reserves. Holdings of the world's largest gold ETF (SPDR) have risen to 4,046.36 tons, a new high since October 25. Sustained institutional capital inflows confirm the strength of the trend. The price-volume structure shows the characteristic of "rising with expanding volume and falling with shrinking volume", indicating strong bullish absorption capacity.

Today's gold trading strategy
buy：4180-4185
tp:4195-4200
sl:4170

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