In the early hours of trading on Tuesday, December 24, spot gold was moving within a narrow range, hovering around $2615.35 per ounceAfter experiencing a lackluster holiday season trading on Monday, gold prices were under significant pressureA strong rebound in core durable goods orders in the U.Shelped strengthen the dollar, while the 10-year U.STreasury yield hit a fresh six-month highThis combination of factors led to a notable decline in gold pricesThe U.Sdollar index rose 0.4% on Monday, hovering near a two-year highThis marked the fourth consecutive increase in the dollar index over five trading days, with a cumulative rise of 1.2%. This shift diminished the appeal of gold for holders of other currenciesMeanwhile, the 10-year Treasury yield surged by 7.3 basis points to close at 4.597%, the highest level since May 30, 2023, after briefly touching 4.599% during the day.

Looking ahead, both bond markets and the gold market, along with the majority of markets in Europe and the U.S., will close early on Tuesday (Christmas Eve) and remain closed on Wednesday due to the Christmas holiday

For the remainder of the day, the market will be watching closely for U.Snew home sales data for November and any updates on geopolitical developments.

The Federal Reserve's shift in tone last week, suggesting a reduced pace of rate cuts in 2025, further added downward pressure on gold pricesFed Chairman Jerome Powell also indicated that future rate cuts would be cautious, while citing the ongoing strength of the U.SeconomyThis, coupled with a series of stronger-than-expected economic data, significantly lowered the appeal of goldAccording to the CME’s FedWatch tool, there is a 91.4% probability that the Fed will keep rates unchanged in January 2025, with an 8.6% chance of a 25-basis-point cutThe odds for a rate cut in March 2025 stand at 41.7%. These developments suggest that gold prices will likely remain under pressure in the near term.

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economy, key durable goods orders for November saw a strong increase, particularly in machinery, while new home sales rebounded after being negatively impacted by hurricanesThese figures suggest that, as 2023 draws to a close, the U.Seconomy remains resilientHowever, there are growing concerns that the incoming government might impose tariffs or raise duties on imported goods, which could dampen economic growth in the coming yearOther data released on Monday showed a decline in consumer confidence for December, although consumers remain optimistic about the labor marketAdditionally, strong consumer spending data from last week highlighted the economy’s resilience, contributing to the Fed’s decision to reduce its expected pace of rate cuts for 2025.

The combination of these factors suggests that the dollar and Treasury yields will likely continue to strengthen in the short term, which will put pressure on gold

As a result, the outlook for gold remains one of consolidation or possible downside over the next few months, with the potential for a return to lower levels.

On the technical front, today’s gold market is expected to remain relatively quiet, given the early closure of U.Smarkets for the holidayGold has been trading in a narrow range, with little momentum for a strong reboundThe strength of the dollar continues to limit any potential upward movement in gold pricesIn the daily chart, we can see a back-and-forth tug of war between buyers and sellers, with no clear direction yetTraders will continue to focus on key levels, with $2600 being a critical support zoneA breach below this level could trigger further weakness, while holding above it would allow for a continuation of the consolidation phase.

Yesterday, gold prices briefly surged higher but quickly reversed course, failing to sustain any significant upside momentum

The market is still being driven by the bears, as evidenced by the continued pressure from the dollar bullsIn the short-term, traders should continue to focus on selling opportunities around the $2620 level, as gold remains under heavy downward pressureThe next key support level for gold lies at $2600, and the market may move towards this level during the Asian and European trading sessionsGiven the holiday mood and light trading volume, a significant price movement may be unlikely, but a small pullback towards $2600 could offer opportunities for short positions.

As for the strategy, traders should consider shorting gold on rallies, especially if prices approach the $2620–$2625 resistance zoneA potential target for shorts could be the $2600–$2598 support areaAs the market remains in a range-bound mode, patience will be key, and traders should be prepared for potential choppy movements over the next few sessions.

Turning to the oil market, U.S

crude oil prices were oscillating around $70 per barrel last Friday and remained in the same range this weekThe sharp drop in oil prices was primarily due to U.Scrude inventory data and monthly reports from major oil agencies, which pointed to excessive production and rising inventories, both of which weighed on the oil market.

Geopolitical factors continue to be a significant influence on oil pricesMarket participants are keenly aware of the ongoing tensions in key oil-producing regions, which could trigger volatility in pricesDespite the bearish fundamentals stemming from the supply side, geopolitical risks continue to provide an underlying floor for oil prices, keeping traders on edge.

In terms of strategy, the best approach for the oil market is to trade within the established rangeOn the upside, watch for resistance around $69.2–69.6, with stronger resistance at $71. On the downside, key support levels lie at $68 and $67. The current price action suggests that oil is in a weak state, as it has fallen below all of its moving averages