Currently, the technical outlook for gold clearly needs adjustment. Market sentiment is no longer as enthusiastic, coupled with concerns about insufficient liquidity reserves, and investors who previously booked profits are now looking to cash out. Therefore, gold is very likely entering a correction cycle, and everyone's main concern boils down to one question: at what price level should we enter? When gold prices surged last December, many regretted not increasing their positions; now, everyone is waiting for this wave of correction to buy the dip.

Let's first look at the fundamentals. The core issue hinges on "whether the Federal Reserve will cut interest rates." Recently, the US released a series of economic indicators that look quite impressive on the surface: the unemployment rate dropped to 4.4%, hitting a new low; retail sales continued to grow; and inflation has been effectively controlled. Theoretically, the Fed should start cutting rates to boost the economy, right? But things are not that simple.

To put it plainly, these good-looking data are what certain people want the Fed to see. We all know that the President has been pressuring the central bank to cut rates, for a very straightforward reason: rate cuts can push down the dollar's value, giving American manufacturing a chance to bring business back home, and economic vitality will follow.

The problem is— the Fed is not buying this. Yesterday, many Fed officials spoke out in unison, with a very firm stance: inflation issues have not been truly resolved, now is not the time for a rate cut, and restrictive policies must continue without loosening. Kashkari explicitly said there’s no need to cut rates in January; Powell hinted that rate cuts might have to wait until the second half of this year, with limited scope; Bostic even stated that the fight against inflation is still ongoing, and there can be no slack.

This gets interesting— the President and the central bank are singing different tunes, and the "rate cut expectations" story that was previously hyped up by the market is now clearly being rewritten. For ETH and other risk assets, this divergence could bring volatility opportunities.