Recently, gold’s price action has been quite interesting—the chart looks pretty tangled, but the fundamentals are actually pretty solid. Both bulls and bears are duking it out at high levels, and neither side is willing to back down first.

You can see from the candlestick patterns that the upper and lower shadows are especially long, with prices bouncing repeatedly around the 5-day and 10-day moving averages. What does this mean? It suggests that capital is hesitating, everyone is trading short-term intraday, and no one dares to go in heavy to bet on a direction. That said, the short-term moving averages are still trending upward, so the technical picture hasn’t really broken down. This situation looks more like profit-taking at high levels rather than a signal of a trend reversal.

What’s really interesting is the fundamentals. Right now, the market is pricing in an 89% probability of a 25 basis point Fed rate cut in December, a significant jump from 63% in early November. Why so much certainty? Because US economic data just isn’t looking good—September’s unemployment rate rose to 4.4%, retail data fell short of expectations, and the manufacturing PMI has been stuck below the expansion/contraction threshold.

Even more crucially, the Fed has started to sound dovish. New York Fed President Williams and others have started signaling rate cuts, and Trump is planning to nominate a dovish candidate for the next Fed chair. With all this, market expectations for monetary easing are running high. As a non-yielding asset, gold naturally benefits in this environment.

So while things might look choppy in the short term, the medium- to long-term bullish case is actually pretty solid. The technicals are building momentum, the fundamentals are providing a floor, and now it’s just a matter of which catalyst will break the current stalemate.