On Wednesday, December 18th, the gold market in Asia observed a slight uptick, with spot gold trading around $2646.67 per ounceOver the past two trading days, however, the price volatility of gold has contracted as investors opted to refrain from making significant positions ahead of the Federal Reserve's monetary policy decisionThe Fed commenced its two-day policy meeting on Tuesday, drawing attention to its updated economic forecasts and the dot plot that could reshape expectations for interest rate trajectories in 2025 and 2026.

U.Sretail sales in November exceeded expectations, coupled with a rebound in inflation data over recent months, suggesting that the Federal Reserve might pause interest rate cuts in January

According to the CME Group's FedWatch Tool, the market anticipates a 97.1% probability for a 25 basis points rate cut from the Fed, whereas the likelihood of another rate cut in January stands at a mere 16.3%.

In terms of policy decisions, central banks from Japan, the UK, Sweden, and Norway are expected to announce their strategies later this weekThe Central Bank of Chile decided to lower its benchmark rate by 25 basis points to 5%, continuing a easing cycle initiated last year, while also cautioning about short-term inflation risks.

In an environment of low-interest rates, non-yielding gold has often performed wellTraders are also keeping a close eye on forthcoming U.S

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Gross Domestic Product (GDP) and inflation data to gather further insightsMeanwhile, Indian trade and government officials indicated that due to the lack of significant holidays and the rebound in prices leading buyers to postpone purchases, India’s gold imports are expected to decelerate significantly in December after hitting record levels in November.

Overall, the tense geopolitical climate, the dovish outlook of many central banks worldwide, U.Stariff threats, and policy uncertainties are supporting gold pricesYet, robust U.Seconomic data could lead the Federal Reserve to revise down its expectations for rate cuts next year, pushing the U.Sdollar and Treasury yields stronger, therefore creating downward pressure on gold prices.

Investors should remain vigilant for statements from the Federal Reserve regarding interest rates and comments from Fed Chair Jerome Powell during press conferences, as any shifts in market expectations could be significant.

From a technical perspective, the daily outlook reflects volatility; gold prices have retreated after encountering resistance near the upper Bollinger Band, showing pressure from several short-term moving averages

The MACD indicator indicates a shrinking red column with a potential death cross, while the KDJ has also formed a bearish crossThe 5-day moving average is consistently crossing below both the 10-day and 55-day moving averagesUntil gold price breaks above the 55-day moving average at $2668.66, the market is inclined towards a bearish trend, with targets potentially reaching the 100-day moving average near $2604.60, which is also close to the support seen at the November 26 low.

However, recent movements in gold below the $2630 price point are typically characterized by lower shadow candles, suggesting robust support from dip-buyersShould the gold price manage to rebound above the 55-day moving average, the risk of further downside could be mitigatedIn the short term, the 10-day moving average around $2661.25 also serves as a resistance level.

On a 4-hour technical level, a reverse V pattern indicates potential oscillation, suggesting that gold prices may fluctuate between $2600 and $2660 for a while before selecting a clearer direction

Currently, around previously established support levels near the prior consolidation range, the KDJ shows bullish crossover behavior, and the MACD indicators reveal shrinking green columns and the potential for a bullish crossoverA similar candlestick formation akin to a 'morning star' pattern at relatively low prices signifies a potential reversal of the downward trend since $2726. Initial resistance is observed near the 200-period moving average around $2656.06, while the 55-day moving average and this week's high at around $2664.49 act as additional resistance layersA breakout beyond this threshold may signal a stronger bullish outlook, with further resistance anticipated near $2675.08.

However, with the 21-period moving average falling below the 55-period moving average, the risk of further declines remains present

Should the price break below the weekly low around $2633, it could see additional support near $2613.55. In the short term, the 5-period moving average around $2643.27 also presents potential support.

Resistance levels identified include: 2655.60; 2661.25; 2664.50; 2668.66; 2675.08; 2680.00;

Support levels include: 2643.27; 2636.63; 2632.99; 2627.51; 2620.83; 2613.55;

Overall, the technical landscape indicates significant variability in short-term movementsBoth buyers and sellers have their opportunities, with a slight inclination towards bearishness in oscillating behavior.

In conclusion, close attention should be paid to the Federal Reserve's interest rate decision and comments from Chair Powell during upcoming press conferences