Gold short-term pullback, non-farm payrolls tonight will be the key to the market

During the Asian session on December 16, spot gold sharply dropped, briefly breaking below the $4300/oz level. As of 3:00 pm that day, it was fluctuating around $4285, down 0.5% for the day. The decline was driven by profit-taking by futures traders and weak long positions closing, coupled with positive news from Ukraine peace talks, which cooled risk aversion sentiment and suppressed gold demand.

However, the downside space for gold may be limited. The Federal Reserve has completed its third rate cut of the year this month and signaled continued rate cuts into 2026, significantly lowering the opportunity cost of holding gold and providing strong support for gold prices. Additionally, global central banks have been increasing their gold holdings for 13 consecutive months, with net gold purchases expected to surpass 1,200 tons in 2025, further solidifying the long-term demand and supporting the gold price floor.

Tonight, the US non-farm payrolls report, retail sales, and PMI data will be released, which are crucial for judging the Fed's future interest rate path. Weak employment data and rising expectations for rate cuts will push gold prices higher; strong data may lead to further selling.

From a technical perspective, the overall trend for gold remains bullish. Prices are well above the 100-day EMA, the four-hour Bollinger Bands are opening, and RSI is stabilizing around the midline, indicating increasing short-term bullish momentum. Resistance levels are first at $4,350, with a breakout potentially targeting new highs of $4,365 and $4,381. Support levels focus on $4,285; if broken, the next support is at $4,257, with a key support at the 100-day EMA at $4,210. Short-term volatility may intensify, and non-farm payroll data will be the core guide for market direction.

Gold plunges below $4,300! Tonight's non-farm data will determine the fate of the market

Attention! On December 16, during the Asian session, gold suddenly tumbled, directly breaking below the $4,300 level. It is now struggling around $4,285, down 0.5% for the day. The main cause was a wave of profit-taking and liquidation, plus positive news from Ukraine peace talks, leading investors to withdraw risk assets and causing a sudden cooling of gold demand.

But don’t rush to short! The Fed has just completed its third rate cut of the year and hinted at further cuts in 2026, lowering the cost of holding gold significantly, which is a “confidence booster” for gold prices. Moreover, global central banks are aggressively accumulating gold, with 13 consecutive months of purchases, giving gold a strong long-term foundation.

The real showdown is tonight! The release of non-farm payrolls, retail sales, and PMI data will be the “weather vane” for Fed rate policy. Weak data = increased rate cut expectations = gold soaring; strong data = gold may face further selling!

From a technical standpoint, there are clear signals: the main trend remains upward. Resistance levels are first at $4,350, with a breakout potentially pushing prices to new highs of $4,365 and $4,381. The first support is at $4,285; if broken, the next support is at $4,257, with a key support at the 100-day EMA at $4,210. Tonight’s non-farm payrolls will be decisive; those seeking precise entry points should stay tuned for real-time updates!