On December 15, reports citing sources indicated that the Bank of Japan (BOJ) may maintain its commitment to raising interest rates in December, with the pace of hikes dependent on the economy's response to each adjustment. A recent survey showed that 90% of economists expect the BOJ to hike rates by 25 basis points at its December 18-19 meeting, with market pricing also reflecting a 90% probability of such a move. However, sources noted that the BOJ will avoid using "neutral rate" estimates as the primary tool for guiding future rate hikes. Instead, the central bank will emphasize that future decisions will depend on assessing the impact of past rate increases on bank lending, corporate financing conditions, and broader economic activity. This communication strategy aims to counter market expectations of a linear tightening path, where rate hikes would mechanically stop once rates approach the lower bound of neutrality. By downplaying specific neutral rate levels, the BOJ seeks to retain policy flexibility amid complex economic conditions, ensuring monetary adjustments align with the real economy's resilience.

Meanwhile, the World Gold Council's latest data revealed that global physical gold ETF inflows reached $5.2 billion in November, marking six consecutive months of inflows. By the end of November, total assets under management (AUM) rose to $530 billion, up 5.4% month-on-month, while total holdings increased 1% to 3,932 tons—both hitting record highs for the month. This year's cumulative inflows are on track to set an annual record. Regionally, Asian funds led the inflows, with North America and Europe showing steady growth. Asia saw approximately $3.2 billion in inflows, with China dominating at $2.2 billion, likely further boosted by recent adjustments to gold market VAT policies.

Key data to watch today include the U.S. December Empire State Manufacturing Index, Canada’s November unadjusted CPI annual rate, and October manufacturing sales monthly rate.

**Gold/USD** Gold climbed steadily on Friday, reaching a seven-week high, with the pair currently trading around 4,337. The primary driver remains the Fed's recent dovish rate cut and less hawkish-than-expected stance, alongside persistent geopolitical tensions fueling safe-haven demand. However, a stabilizing U.S. dollar index capped further gains. Resistance is eyed near 4,380, with support at 4,300.

**USD/JPY** The pair edged higher on Friday, supported by short-covering and a rebound in the dollar amid optimistic Fed remarks. It now trades around 155.10, though expectations of a December BOJ rate hike limited upside. Watch resistance at 156.00 and support at 154.00.

**AUD/USD** The Australian dollar dipped slightly on Friday, pressured by profit-taking and a firmer dollar, currently at 0.6650. Lingering risk-off sentiment and declines in crude oil and iron ore prices also weighed on the commodity-linked currency. Resistance lies near 0.6750, with support at 0.6550.