1203 Gold trading plan and analysis

Hello traders,

The first trading week of December is full of uncertainties. These uncertainties arise from various factors. Firstly, market sentiment plays an important role in the market. Emotion-driven trading behavior can lead to irrational price increases or decreases, further amplifying market uncertainty.

Secondly, collective behavior in the market is also a significant source of uncertainty. When a large number of investors converge on a particular viewpoint or strategy, collective action can magnify market volatility. For example, panic selling or chasing prices by investors often triggers a chain reaction, leading to sharp market fluctuations.

Additionally, certain irrational statements made by self-righteous leaders can have a profound impact on the market. These statements may provoke market unease, causing investors to reassess risks and opportunities, which in turn leads to drastic price movements. For instance, the soon-to-be-inaugurated U.S. President Trump.

Over the weekend, Trump publicly stated: "We demand that these countries commit to not creating a new BRICS currency and not supporting any other currency to replace the strong dollar; otherwise, they will face 100% tariffs." The whole world knows that a trade war is imminent, but it remains unclear how significantly it will impact the global economy. Trump's constant rhetoric before taking office has left the market filled with uncertainty about the future. It seems that the Federal Reserve has already taken a backseat, and expectations for significant interest rate changes from the Fed are decreasing!

Trump's policy direction is truly frustrating; his statements are not only unconstructive but may also bring more uncertainty to the market. In the current fragile global economic environment, such behavior is akin to adding fuel to the fire. Particularly, the decline in the ten-year breakeven inflation rate, contrasting with the rise in core CPI, PCE, and PPI, is a clear warning sign.

Worse still, the downward trend in the global central bank liquidity index indicates that market expectations for the Fed's future policies are increasingly pessimistic. If the Fed continues to maintain a tight policy, the global economy could suffer even more. Trump's statements aimed at raising inflation will only exacerbate market unease, making the Fed's choices even more difficult.

The gold market is also under pressure. Although inflation expectations may reverse due to Trump's remarks, there is currently a lack of clear data support, leaving market trends ambiguous. Gold prices may struggle to break through 2700 in the short term and could even face the risk of a pullback.

**Gold**

Last Friday, gold's volatile movement briefly showed signs of continuing upward momentum. However, considering that Friday was the Thanksgiving holiday in the U.S. and the weekend factors, it is advisable to wait until Monday to look for new entry signals.

On Monday, a wave of decline occurred (red arrow). After completing a wave pullback within the channel, the correction has remained sideways until now. In the 4-hour chart, the candlesticks are intertwined with the EMA, requiring new momentum to push gold in a direction.

I tend to observe the 1-hour chart around Tuesday evening during the U.S. trading session, looking for short signals to short gold, targeting the FIBO EXT 1.27 level at 2575.

On the daily level, the sideways market is a corrective adjustment to the significant drop on November 25. The subsequent movement may complete the C-wave pattern from November 25.

Stay tuned for timely updates!

GOOD LUCK!
LESS IS MORE!