In the past week, the global markets faced two major driving forces. On one side, the geopolitical situation in Latin America suddenly heated up, with Venezuela, a major global gold producer, experiencing turmoil. This directly boosted the demand for gold as a safe haven, with institutional funds continuously flowing in. On the other side, expectations for a Federal Reserve rate cut continued to rise—according to CME Fed Funds Futures data, the probability of a 25 basis point cut in March has reached 47.1%. Federal Reserve officials have also stated that inflation pressures have eased and there is ample room for rate cuts. This shift in policy expectations has clearly suppressed the cost of holding gold.

From a longer-term perspective, the factors supporting gold are actually quite solid. Central banks around the world purchased a total of 634 tons of gold in the first three quarters of this year. Although this is a decline compared to the previous year, it still far exceeds the average level of the past decade. Meanwhile, global gold ETF net inflows exceeded 700 tons for the entire year, and domestic gold ETF holdings increased to 247 tons. It is worth noting that in early January, there may be a wave of passive de-risking driven by annual rebalancing, with scale potentially reaching hundreds of millions. However, based on historical experience, such selling pressure is usually only a short-term technical disturbance. Silver will be more affected, but the medium- to long-term upward momentum of gold will not change.

In terms of trading strategy, gold around 4380 and 4384 is a good entry point, with targets at 4405 and 4410.