Gold fluctuates at high levels! It is expected to fall!GoldOANDA:XAUUSDzleo0400 During the European trading session on Friday (January 16th), gold fluctuated and weakened, briefly falling below the $4600 mark to $4591.32, and is currently trading near $4610. The temporary easing of geopolitical tensions and the adjustment of Federal Reserve policy expectations triggered by strong US economic data have jointly weakened investors' demand for gold as a safe-haven asset, putting overall pressure on the precious metals market. The performance of the US dollar index has a direct impact on the price of gold, which is denominated in US dollars. The US dollar index (DXY) is trading near 99.30, having retreated slightly after reaching a 6-week high in the previous trading day, but still limiting the downside potential for gold. The US dollar index measures the value of the dollar against six major currencies, and its strengthening tends to make gold more expensive for non-dollar holders, thus suppressing demand. However, the current moderate decline in the dollar provides some support for gold, preventing a more drastic decline. Geopolitical events are often a key driver of gold price fluctuations, and the recent continuous decline in gold is closely related to the easing of tensions related to Iran. US President Donald Trump said this week that he might postpone military action against Iran after the Iranian government pledged not to execute protesters. This statement significantly reduced market concerns about an escalation of the conflict in the Middle East. In addition, reports indicate that Israel and other Middle Eastern allies actively persuaded the US to postpone any strikes against Iran, further easing regional tensions. These developments have led to a rebound in investor risk appetite, and safe-haven funds that had flowed into gold have begun to shift to other asset classes. As a non-interest-bearing asset, gold often loses its unique appeal when risk sentiment improves, leading to price pressure. Historically, similar periods of geopolitical easing, such as the brief de-escalation of US-Iran tensions in 2019, have also seen similar corrections in gold prices, reminding us of the volatile nature of market sentiment. The strong performance of US economic indicators is another important factor contributing to the decline in gold prices. On Thursday, the number of initial jobless claims in the US unexpectedly fell to 198,000, far below the market expectation of 215,000 and the revised figure of 207,000 from the previous week. This data highlights the resilience of the US labor market, with layoffs remaining low even in an environment of persistently high borrowing costs. Meanwhile, retail sales data released on Wednesday exceeded expectations, rising 0.6% month-on-month in November, reversing the 0.1% contraction in October and surpassing market expectations of 0.4%. The Producer Price Index (PPI) also showed strong performance, with both overall and core indicators reaching 3% year-on-year in November, reflecting persistent inflationary pressures. These positive data points reinforced market expectations that the Federal Reserve will maintain current interest rate levels, with federal funds futures pushing back the next interest rate cut to June. These factors collectively weakened the appeal of gold, as the cost of holding non-interest-bearing assets relatively increases in an environment of stable interest rate expectations. In summary, the recent pullback in gold prices stems from a combination of factors, including the easing of geopolitical risks, strong US economic data, and adjustments in Federal Reserve policy expectations. These changes not only reduced safe-haven demand but also amplified downward pressure through the US dollar index and technical signals. Gold Technical Analysis: Today is Friday, and whether it will be a "Black Friday" remains to be seen, but Fridays often see significant price swings. The key now is that the trading range will eventually be broken, and the direction of the breakout and subsequent trading strategy are crucial. From a chart perspective, the market is currently consolidating at a high level. The high-level consolidation on the daily chart is quite risky, but yesterday's trading volume was relatively high, and the daily candle closed bearish, indicating that bearish pressure still exists. This offers hope for a decline, but since there hasn't been a breakout yet, we shouldn't be too stubborn about our bearish view. It's not too late to chase the trend when a high-level signal appears or when a breakout occurs. This decline, if it happens, will likely be quite significant! We need to pay close attention to whether the support level at 4580 can hold. In summary, the short-term trading strategy for gold today is to focus on shorting on rallies and buying on dips. The key resistance levels to watch are 4625-4630, and the key support levels are 4520-4500. Everyone should keep up with the pace.