On a rather tumultuous Monday, gold prices fluctuated at lower levelsSupport from bargain hunters emerged below, while selling pressure loomed aboveAs the markets awoke on Tuesday, December 17, the spot gold continued its erratic movement, hovering around $2654.40 per ounceMultiple moving averages on the daily chart displayed strong resistance, despite geopolitical tensions and anticipations surrounding potential Federal Reserve rate cuts providing a supportive backdrop for the yellow metalThe prevailing sentiment, however, skews towards a hawkish Fed, fueled by optimistic expectations for the U.Seconomic data, with the USD and U.STreasury yields maintaining robust positionsThis juxtaposition leaves gold vulnerable to further downward pressure.

The fundamental landscape does not favor gold in the short termOn Monday, positive PMI data from the U.S

services sector emerged, showing a substantial leap from the previously recorded 56.1 to an impressive 58.5 for NovemberThis notable increase marks a peak not seen in 38 monthsConsequently, the composite PMI output index, which encapsulates both manufacturing and services sectors, rose from 54.9 to a substantial 56.6, the highest level since March 2022.

Market participants also anticipated a robust retail sales figure, estimating a month-on-month growth of 0.5%, a positive shift from the previous 0.4%. If these projections hold true, it would represent the best performance since April.

Furthermore, the forecasted GDP for the fourth quarter stands at 3.3%. Such favorable economic data is likely to bolster yields and provide additional strength to the dollar, particularly as traders speculate that the Fed's anticipated rate cut this week might very well be the last for some time.

Moreover, the consensus appears to be that the Federal Reserve will adopt a hawkish stance this week, indicating a potential reduction in the number of rate cuts expected for next year

Following the presumed rate cut on Wednesday, the market now assesses a 37% probability for a total cut of just 25 basis points or potentially no cuts throughout 2025, a significant increase from the previous week’s 21% likelihood.

In a notable shift, U.S10-year Treasury yields rose to levels not seen in nearly three weeks after achieving five consecutive daily gainsAlthough Monday saw some resistance to this upward momentum, the absence of any downturn signs thus far leaves gold prices still subject to pressure.

In addition to the Fed’s trajectory, central banks in Japan, the UK, and Norway are also convening for meetings this week, with expectations pointing toward a wait-and-see approach come Thursday.

Amid these economic narratives, reports from Saudi media, as cited by the Israeli Times, suggest that a ceasefire and hostages' release agreement may be on the horizon

An unnamed Hamas leader indicated, “If Netanyahu does not obstruct this agreement, we are closer than ever to a ceasefire and hostage exchange deal.” This remark also reflects the necessity for the U.Sto exert pressure on Israel to facilitate these discussions.

Conversely, the fundamental factors do present some glimmers of support for goldDisappointing manufacturing data from the U.Ssurfaced, with S&P Global reporting a decline in the manufacturing PMI from November’s 49.7 to a dismal 48.3. Economists had previously forecasted a preliminary index reading of 49.8. Being below the 50 threshold indicates a contraction in the manufacturing sector, which constitutes 10.3% of the economy.

Additionally, the factory output index sank from 47.9 in November to 46.0, establishing a new nadir since May 2020.

On a broader scale, the French central bank, in its quarterly outlook report, predicted that France's economic growth over the next two years may be stunted, primarily due to internal political turmoil compounding the global volatility affecting economic activities.

Globally, central banks are entering a cycle of potential rate cuts, with expectations that the Riksbank of Sweden may lower rates by 50 basis points this week.

In summary, while the immediate fundamentals tilt bearish for gold in the short run, there remains a foundation of support that could come into play over the medium term, particularly considering geopolitical developments and global policy shifts.

From a technical perspective, the daily chart reveals a shaky environment; the gold price has retreated after encountering multiple resistance points near the upper Bollinger Band

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A bearish crossover of the KDJ indicator and the shrinking red bars on the MACD signal a weak bounce on MondayHence, the next leg may test the lower Bollinger Band support around $2602.55. Short-term support zones near the December 9 low of $2627.51 and the December 6 low of $2613.55 may provide additional lifelines.

Upside resistance is currently positioned around the 10-day moving average near $2661.94 and the 5-day moving average at $2670.14; closing above these levels could momentarily alleviate the bearish outlook.

On the 4-hour timeframe, a V-shaped reversal preceding another wave of fluctuation suggests volatility aheadWhile the KDJ has flashed a bullish crossover, the MACD continues to display a bearish crossover but the shrinking red histogram implies diminished selling pressureUntil the middle Bollinger Band at $2671.37 is shattered, the tendency remains toward a downward trend

A breach beneath Monday’s low of $2643.41 could lead to further tests of the lower Bollinger Band at $2627.29.

Adding to the complexity, the region between $2620 and $2658 encompasses significant trading volume previously, hence it might act as a safety net for pricesA decisive break above the middle Bollinger Band could momentarily diminish bearish signals.

Resistance levels are defined at $2658.75, $2661.94, $2671.37, $2675.08, $2680.00, and $2692.68, while support can be found at $2648.34, $2643.41, $2634.57, $2627.51, $2620.89, and $2613.55.

To sum up, while the technical indicators suggest a bearish short-term outlook for gold, it is essential to remain vigilant against potential bullish rekindlingMoving forward, pivotal events such as the U.Sretail sales data slated for Tuesday, the Fed's interest rate decision on Wednesday, the Bank of Japan's meeting on Thursday, and the release of the U.S