From late 2025 to early 2026, major global economies will face multiple pressures and uncertainties simultaneously in monetary policy, exchange rate trends, and geopolitics. In Japan, persistent yen weakness has triggered public concern among businesses about government policy. Leaders of Japan's two main business lobbying groups told domestic media that while yen depreciation benefits exporters' profits in the short term, it also raises import costs and increases the burden on households and businesses, especially small and medium-sized enterprises reliant on imported raw materials. Regarding overall national strength and long-term development, a stronger yen is more advantageous. Although the BoJ raised rates twice in 2025, the yen failed to benefit significantly from U.S. dollar weakness. Recent inflationary pressure caused by yen depreciation prompted the BoJ to persuade the cautious government to hike rates again last month, but uncertainty about the pace of further tightening limits the yen's recovery potential. At year-end, the yen traded around 157 per dollar, close to the level at which authorities previously signaled support for the currency, raising market expectations of possible renewed foreign exchange intervention. The last time Japan intervened in the FX market was July 2024, when the yen hit a 38-year low.

Within the Federal Reserve, there is caution about further easing. Philadelphia Fed President Anna Paulson stated that before assessing the impact of previous rate cuts, the next cut may still need to wait. She expects inflation to continue moderating, economic growth to remain moderate, and the labor market to have cooled somewhat, but without clear signs of disorder. Against this backdrop, a modest adjustment to interest rates later this year is possible, but the current federal funds rate remains slightly restrictive, helping to keep inflationary pressures contained. In 2025, the Fed cut rates three times by 25 basis points each, lowering the target range to 3.5%–3.75%, and chose to hold steady at the December meeting. Policymakers must balance controlling inflation with supporting employment, while also facing political pressure for more aggressive cuts. Although Fed forecasts suggest room for further easing, guidance on specific timing remains limited. Meanwhile, geopolitical events add new uncertainty to global markets. The U.S. arrest of Venezuelan President Nicolás Maduro prompted investors to reassess regional stability and the international order. This move is seen as the most direct U.S. intervention in Latin America in decades and could heighten risk-aversion in the short term, impacting market sentiment and asset prices. Although markets were closed when the event occurred, global financial markets started the new year strongly, continuing the upward trend formed at the end of 2025 amid central bank policy adjustments, tariff disputes, and multiple geopolitical risks. Analysts note that if Venezuela's political situation stabilizes, its vast oil resources could gradually be released, increasing global energy supply and supporting economic growth. However, due to long-term mismanagement, aging infrastructure, insufficient investment, and political and security risks, meaningful production recovery in Venezuela will take considerable time and will heavily depend on sustained political stability and large-scale capital inflows.

Based on the daily chart, USD/JPY's Bollinger Bands are narrowing, and moving averages are flattening. On December 19th, 2025, a large bullish candle broke above the Bollinger Upper Band, indicating a return to an uptrend in the short term, with a high probability of testing 158 or 160 again. The MACD and signal lines retraced to the 0 axis and formed a golden cross again, confirming a buy signal. RSI is at 58, with higher lows, suggesting market participants are mainly buying. Support levels are at 156 and 155. From a weekly perspective, the price oscillates upward near the EMA12 and remains within an ascending channel. As long as it does not break below EMA12 effectively, it could challenge 160. The MACD is poised to form a "kiss of the angel" pattern. RSI is at 66, indicating a predominantly bullish market. Buying at lows is recommended.

Trade Direction: Buy

Entry Price: 157

Target Price: 160

Stop Loss: 155

Support: 154.7/153.2/150

Resistance: 158/158.8/160

During the European session on Friday, gold prices extended their gains to around 4396, rising 1.45% on the day and approaching the 4400 level. The advance was mainly supported by expectations of further Fed rate cuts and ongoing safe-haven demand. In addition, investors are awaiting US economic data due later this month to assess the future path of interest rates. Next week’s release of the December US nonfarm payrolls report will be a key focus for markets.

At its December policy meeting, the Fed lowered interest rates by 25 basis points, bringing the federal funds target range to 3.50%–3.75%. Minutes from the Federal Open Market Committee showed that most Fed officials believe further rate cuts would be appropriate if inflation continues to ease, though they remain divided on the timing and magnitude of additional easing. Lower interest rates could reduce the opportunity cost of holding gold, thereby supporting the non-yielding asset.

Nevertheless, gold’s upside may be limited, as traders could lock in profits or rebalance portfolios. We expect that as much as 13% of total open interest in the COMEX precious metals market could be liquidated over the next two weeks, leading to a significant repricing and downward pressure on prices. Post-holiday liquidity conditions may further amplify price volatility.

From a longer-term perspective, bullish views on gold remain dominant among major banks this year, particularly given expectations of further Fed rate cuts and US President Trump’s ongoing reshaping of the Fed’s leadership. The baseline forecast sees gold rising toward 4900, with risks skewed to the upside.

Gold prices posted a strong start on the first trading day of the new year, extending early Asian session gains during European hours and approaching the 4400 level. In fact, this move is better described as a rebound following a sharp sell-off rather than a fresh rally. Such rebounds are unlikely to be sustained in the short term, as the time window is overly crowded and upside momentum is likely to be quickly exhausted. Avoid chasing moves.If the price falls to the bottom, the primary strategy is to buy on dips.

Trade Direction: Buy

Entry Price: 4300

Target Price: 4465

Stop Loss: 4250

Valid Until: January 16, 2026 23:55:00

Support: 4303 / 4274/ 4256

Resistance: 4374 / 4404/ 4414

The Federal Open Market Committee's minutes from its December 9-10 meeting indicate that the majority of Federal Reserve officials view additional rate cuts as appropriate, contingent upon a sustained decline in inflation over time, despite ongoing disagreements regarding timing and magnitude. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, thereby supporting its status as a safe haven asset. According to Reuters, last week Russia accused Ukraine of deploying drones against the Russian presidential residence in northern Russia, prompting Moscow to reconsider its stance in peace negotiations. Ukraine refuted Russia's allegations of drone attacks, with its foreign minister stating that Moscow is seeking "false pretexts" for further aggression against its neighbor. Furthermore, ongoing tensions between Israel and Iran, alongside U.S.-China geopolitical strains, may also exert upward pressure on gold prices. Market participants typically seek assets that preserve value during periods of uncertainty, which sustains demand for traditional safe-haven assets such as gold. Conversely, opportunities for profit-taking or portfolio rebalancing might constrain further price appreciation. The Chicago Mercantile Exchange Group, one of the world's largest commodity trading platforms, has increased margin requirements for gold, silver, and other metals to mitigate the risk of default and ensure market stability by requiring traders to commit more capital when entering positions.

The Federal Reserve has cut its policy interest rate by 25 basis points, lowering the federal funds rate target range to 3.50%–3.75%. This adjustment reduces the opportunity cost of holding non-interest-bearing assets and reinforces the narrative that additional easing remains plausible. Regarding gold, rate decline expectations typically influence markets through two channels: first, a decline in real interest rate expectations prompts a reassessment of cash-equivalent assets' relative attractiveness; second, risk appetite tends to fluctuate intermittently in a loosening monetary environment, leading some investors to use gold as a portfolio stabilizer rather than reacting passively to volatility. However, while the direction of interest rates is clear, the pace remains a source of market fluctuation. The latest Federal Reserve meeting minutes suggest a cautious approach, with most officials preferring to consider further rate cuts only if inflation continues to decline, and no definitive timeline or pace has been established. The probability of a rate cut in January has been pushed to around 15%, indicating a likely shift toward an “observation period.” This divergence in market expectations makes it unsurprising that gold could see some profit-taking after initial gains. Once the most evident catalyst materializes, trading focus tends to shift from “directional bets” to “timing,” making price levels more vulnerable to repeated tests at high ground.

Gold, in the 4H timeframe, exhibits narrowing Bollinger Bands with flat-moving averages, indicating that the overall short-term bearish trend remains intact. Following a rebound to the middle Bollinger Band, price consolidates, suggesting significant resistance above. The MACD has formed a golden cross below zero, with diminishing downward momentum; the MACD line and signal line are pulling back towards the zero-axis, currently at a considerable distance, implying the rebound is incomplete. If the price fails to establish support above the middle Bollinger Band, a further correction towards the 200 EMA or the lower Bollinger Band is likely, at levels of approximately 4266 and 4245 respectively. The RSI stands at 51, indicating a neutral market, with resistance levels at 4400 and 4430. In the 1W timeframe, the price is rising along the upper Bollinger Band, but a bearish engulfing pattern appears on the candlestick. As long as it does not break above 4550, a short-term correction towards the 12 EMA (~4200) is expected. The RSI's peak is beginning to decline, forming an M-top pattern. Meanwhile, with an RSI value of 70, the price remains in bullish territory. It is recommended to go short before going long.

Trading Direction: Sell

Entry Price: 4430

Target Price: 4100

Stop Loss: 4600

Support: 4200, 4100, 3800

Resistance: 4530, 4550, 5000

In terms of monetary policy, the Bank of England transitioned from a cautious wait-and-see approach to gradual easing in 2025, with the path of rate cuts marked by divergence and strategic negotiations throughout the year. Early in the year, the central bank maintained elevated interest rates to suppress persistent inflation; however, as economic data remained subdued, the labor market cooled, and inflation gradually declined, the policy stance began to soften. In August, the Bank cut interest rates by 25 basis points to 4%, and on December 18, it further reduced rates by another 25 basis points to 3.75%, with the decision favoring a narrow majority of 5 to 4 votes, prominently featuring Governor Andrew Bailey’s dovish stance as a pivotal factor. This rate reduction aligned with market expectations and signaled a shift in the Bank’s primary focus from inflation fighting to supporting economic growth. Nonetheless, the close voting results underscored significant internal disagreement within the Monetary Policy Committee, with four members expressing concerns over the persistent risks posed by inflation. The overarching logic throughout the policy evolution involved balancing inflation deceleration against economic softening. Initial high inflation constrained the scope for easing, but subsequent downward surprises in inflation and ongoing economic slowdown created favorable conditions for rate cuts. Additionally, a reduction in private sector wage growth from 4.2% to 3.9% further mitigated the risk of a wage-price spiral.

The U.S. dollar concluded 2025 with its most pronounced annual decline in eight years. Given that at least two rate cuts are factored into this year's outlook, the Federal Reserve's monetary policy trajectory diverges from that of the Bank of England, reducing the dollar’s appeal. According to the Chicago Mercantile Exchange FedWatch Tool, market participants estimate nearly a 15% probability of a rate reduction at the Federal Open Market Committee's January meeting. Additionally, it is anticipated that President Donald Trump will appoint a dovish successor to President Powell, whose term concludes this year, potentially further suppressing the dollar. Trump has expressed his desire for the next Federal Reserve Chair to maintain low interest rates and to be in agreement with his views, which could heighten concerns among investors and policymakers regarding the independence of the Federal Reserve.

In the 1D timeframe, the GBPUSD exhibits a bearish reversal pattern characterized by a Dark Cloud Cover formation, with the price temporarily breaking below the EMA12. The MACD line and signal line are approaching a death cross, while the RSI has peaked and begun to decline, indicating ongoing corrective pressure. A break below the EMA12 would place initial support at the EMA50 and the middle band of the Bollinger Bands, approximately at 1.334 and 1.337 respectively. The RSI is at 60, suggesting a bullish market sentiment. In the 4H timeframe, the Bollinger Bands are expanding downward, with the SMAs diverging downward. The price has breached the EMA50, and a death cross has formed as the MACD line and signal line intersect, both crossing below zero-axis, signaling a short-term bearish momentum. Key support levels are near the EMA200 and psychological round numbers at approximately 1.336 and 1.340. The RSI is around 44, reflecting a bearish market sentiment, with the RSI peaks gradually decreasing. Therefore, it is recommended to go short at the highs.

Trading Direction: Sell

Entry Price: 1.346

Target Price: 1.29

Stop Loss: 1.36

Support: 1.3, 1.29, 1.28

Resistance: 1.35, 1.36, 1.373

CME stated that it would raise precious metals futures margins for the second time in one week after the market close on Wednesday, against the backdrop of a period of sharp volatility in the precious metals market. In its statement, the exchange announced margin increases for gold, silver, platinum and palladium contracts, noting that the decision was made based on a review of "market volatility to ensure adequate collateral coverage".

This week, precious metals saw wild swings as they wrapped up a turbulent and historic year. Silver witnessed particularly notable volatility: its futures price surged to an all-time high above $82.00 per ounce earlier on Monday, followed by a sharp pullback. A margin hike means traders are required to post more collateral when trading precious metals futures to ensure they can meet their contractual obligations. The first round of margin increases had already taken effect on Monday.

Despite the recent sharp price fluctuations, gold has significantly underperformed silver. For the time being, gold prices are likely to find final support around the key level of $4,319; this support is expected to provide strong backing for a price rebound and lay the groundwork for a subsequent uptrend.

However, a further break below the critical $4,300 level would signal a deeper correction phase for gold, with the next target set at the 55-day moving average (currently at $4,159). Such a move would also indicate a similar deep pullback in silver prices.

Trade Direction: Buy

Entry Price: 4306

Target Price: 4393

Stop Loss: 4285

Valid Until: 16 January, 2026, 23:55:00

Support: 4303/4298/4285

Resistance Levels: 4331/4341/4375

EURAUD’s current move is best understood as a relative-strength story rather than a euro collapse. Into the final sessions of the year, the euro has lacked fresh bullish catalysts, with macro optimism already priced in and investors reluctant to add exposure ahead of the January data cycle. In contrast, AUD has found short-term support from stabilising risk sentiment and resilience across commodity-linked currencies, which has reduced downside pressure on the Aussie.

This divergence matters because EURAUD had spent recent sessions trending higher in a controlled channel, attracting late momentum buyers near the highs. Once that upside stalled and price failed to extend, the pair shifted into a distribution phase where rallies are increasingly sold. On an intraday basis, this transition typically precedes a corrective leg lower, especially in thin year-end liquidity where positioning adjustments can accelerate moves.

Short-term sentiment has turned decisively cautious on EURAUD. The inability to hold above recent highs signals that buyers are no longer confident chasing strength, while sellers appear more comfortable defending elevated levels. This is reinforced by the fact that risk appetite has not deteriorated sharply; instead, capital is rotating modestly toward higher-beta currencies like AUD rather than flowing defensively into EUR.

From a positioning perspective, EURAUD longs accumulated during the prior upswing are now vulnerable. As price slips back into prior value areas, these traders are more likely to reduce exposure, adding to downside pressure. The absence of strong euro-positive news flow means rebounds are being treated as opportunities to sell rather than signals of renewed trend continuation.

On the M15 timeframe, price has moved back below the Bollinger mid-band, which is a key early warning that short-term control has shifted from buyers to sellers. Repeated failures to close back above this mid-band suggest that upside momentum is being absorbed. The Bollinger structure is starting to tilt lower, indicating that volatility is expanding in favor of the downside rather than compressing for another breakout.

The Ichimoku system reinforces this view. EURAUD is trading below the Kijun-sen, and the cloud ahead is acting as dynamic resistance rather than support. Each attempt to reclaim the equilibrium zone has been rejected, implying that the market’s short-term “fair value” is drifting lower. As long as price remains capped under the Kijun and the lower edge of the cloud, the bearish intraday bias remains intact.

The Stochastic (5,3,3) has rolled over from the upper range and is moving lower without reaching deeply oversold conditions, which is typical of a healthy corrective phase. This tells us downside momentum still has room to develop before sellers become exhausted, supporting continuation rather than a sharp snapback.

Entry: 1.76

Take Profit: 1.7250

Stop Loss: 1.775