On Tuesday, November 11, we noted that although easing Middle East geopolitical tensions and falling oil prices alleviated inflation concerns and reduced the need for the Fed to hike rates consecutively, the dollar index fell in tandem, providing support for gold. However, last Friday's strong nonfarm payroll data kept market expectations for a December Fed rate hike elevated, directly capping gold's rebound. Therefore, we advised traders to watch upside resistance at $4,100 and $4,150 and downside support at $4,060 and $4,030. Should the upcoming CPI data amplify market volatility, continue watching $4,200 to the upside and $4,000 to the downside.
Looking at the subsequent price action, during Tuesday's European session, gold fell to $4,068 and stabilized temporarily. After the U.S. session opened, gold rebounded to $4,080 but met resistance and pulled back again, touching a low of $4,013. After stabilizing, gold began to rebound. On Wednesday's open, gold continued to recover, rising to $4,066 before encountering resistance, and is currently trading around $4,050. Overall, gold remains under short-term pressure, giving back all of Monday's gains, with its rebound still capped.
Wolfinance star analyst believes that gold came under pressure on Tuesday, falling more than $100 in a single day. The direct trigger was the U.S. CPI data released that day, which comprehensively exceeded market expectations. Specifically, Fed Governor Waller spoke before the data release, stating that if core CPI reached 0.3% or higher, a 50-basis-point hike should be considered in December. The hawkish stance prompted the market to reprice the rate path in advance, causing gold to come under pressure during the European session and lose the $4,100 integer level. The subsequently released U.S. CPI data showed headline CPI rose 0.4% month-over-month, above the expected 0.3%, while core CPI rose 0.3% month-over-month for a third consecutive month, above the expected 0.2%. With core inflation persistently rising, the market repriced the Fed's policy path. Expectations for a 25-basis-point hike in December were fully priced in, and the probability of a 50-basis-point hike briefly rose to 15%. The dollar and Treasury yields strengthened in tandem, putting further pressure on gold, which hit a new one-week low.
Looking ahead, market expectations for a December Fed rate hike continue to cap gold's rebound and weigh on prices. On the daily chart, gold retreated from a two-week high and hit a new one-week low, with its rebound still limited. For downside support, watch the intraday low near $4,030, which is also the weekly MA5 level, followed by the $4,000 integer level; a break below here would increase short-term pullback risk. For upside resistance, watch the intraday high at $4,067, which is also the low from Tuesday's European session pullback, followed by the $4,100 integer level; a breakout above could target $4,150, where gold repeatedly met resistance during its rebound over the past week. The 5-day moving average golden cross has turned slightly downward, the MACD golden cross is slowing, the KDJ golden cross has turned down, and the RSI golden cross has turned back upward but has not yet broken above the midline. The short-term technical picture suggests weakening upward momentum for gold, with the possibility of continued adjustment.
Gold intraday reference: Hawkish remarks from Fed officials and U.S. CPI data comprehensively exceeding expectations have strengthened both the dollar and Treasury yields, weighing on gold prices. In terms of trading, a range-bound approach is suggested. For downside support, watch $4,030 and $4,000; a break below would increase short-term pullback risk. For upside resistance, watch $4,067 and $4,100; if gold strengthens further, watch $4,150.
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