On Monday (December 29), spot gold approached its historical high in early trading. Expectations of the Federal Reserve's monetary policy are the main driver of the precious metals price increase. The market anticipates two Fed rate cuts in 2026, with the first possibly occurring in the middle of the year. The weekly decline in the US dollar index has further enhanced the attractiveness of dollar-denominated precious metals to overseas buyers. Continued rate cuts could push up long-term Treasury yields and weaken the dollar, providing further support for gold and silver prices.

Geopolitical uncertainty is another major driver of precious metal prices. The escalating conflict between Russia and Ukraine has injected risk aversion into the market. Russian Foreign Minister Lavrov warned that the EU is preparing for war with Russia, further exacerbating geopolitical risks. Furthermore, Trump stated that the Russia-Ukraine negotiations have achieved "95% progress," but disagreements remain on key issues such as Donbas. These uncertainties have prompted investors to flock to safe-haven assets such as gold.

From a weekly chart perspective, driven by expectations of low interest rates from the Federal Reserve and escalating geopolitical tensions, gold prices surged last week, breaking through previous highs and reaching a historic high above the $4500 mark. Currently, the moving averages are perfectly aligned in a bullish pattern, and the MACD indicator is in a golden cross. However, caution is advised given the current overbought condition and the holiday trading atmosphere this week.

From a 4-hour chart perspective, although there was a pullback after touching slightly below $4550, the bullish momentum is still strong. Profit-taking at higher levels during the holiday is quite normal. The short-term moving averages are currently perfectly aligned in a bullish pattern and are not far from the price, providing strong support. However, note the potential divergence in the MACD indicator. Therefore, the recommended strategy remains to buy on dips. Resistance: 4520-4530-4540; Support: 4508-4500-4490.

Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.