On Tuesday, November 4, gold prices pulled back, mainly weighed down by firmer oil prices and higher US dollar and US Treasury yields, while the return of negotiations cooled short-term safe-haven demand. Still, the biggest focus in the market has now shifted to the outcome of the US midterm elections, which will be the key driver of sharp short-term moves in gold over the next few days. Should the election results create instability in US politics and fiscal conditions, the dollar will most likely begin to weaken, giving gold a chance to rebound in turn; conversely, if the market takes a positive view of the resilience of the US economy and both the dollar and yields continue to strengthen in tandem, gold will remain under continued pressure.
Looking at the current chart action, the recent gains in gold are still only a small repair after last week's sharp selloff rather than a genuine reversal. Overall bullish strength remains weak and market confidence is insufficient, so prices have been capped by overhead resistance. One very obvious feature of the current market is that it is extremely easily pushed around by sudden news headlines, yet it never manages to break into a sustained one-way trend. For instance, gold rallied twice in the past couple of days but both times stalled and pulled back at the 3970 level above, showing that short-term resistance at this point is very strong and that this is the key barrier determining whether the recent bullish move can extend further.
In any case, gold remains in a state of range-bound观望, still without a clear direction, and the main markets are all waiting for subsequent heavyweight data to provide clear guidance. It is worth noting, however, that if gold prices continue to fail to break above the overhead moving-average resistance, this ongoing consolidation will once again turn into a continuation of the downtrend as a mid-way pause, which would open up more downside room later. Our intraday short-term trading range is actually very clear right now: focus mainly on back-and-forth movement within the broad 3890-3970 zone. If the rebound continues, watch the strong 3970 resistance above; a successful breakout would allow a further look at the 3990-4000 area, and only a firm hold above 4000 would mean gold has truly reversed its current weakness. If, however, prices come under sustained pressure and pull back again, the downside first points to support near 3915-3920, and if that gives way and prices break below the key 3890-3888 support, a medium-term downtrend is likely to begin ahead of schedule.
Given the high level of uncertainty in the market news flow at present, the prudent approach is still to trade lightly back and forth in small size, relying on short-term buying at the low end and selling at the high end of the range, and to avoid blindly chasing rallies or dumping into declines. Wait patiently for the market to break out and choose a new direction. For today's short-term gold trading levels, reference can first be made to the following: 1) Gold can first be considered for another short position near 3965-3970 above, with a stop-loss at 3980 and targets back toward support near 3930-3920 below; 2) If the market then ranges lower again, we would look to the first support near 3920 below, which is the level where an initial long can be considered, with the stop-loss for that long necessarily placed near 3910 below and a target back toward 3955-3965 above for exiting, though if 3920-3910 is broken again, the downside is expected to continue probing the 3890-3895 threshold support, which is also the key support for our second long consideration. Sina partner platform futures account opening is safe, fast and protected. Sina statement: This news is reproduced from a Sina partner media outlet. Sina publishes this article for the purpose of conveying more information and does not mean it agrees with or confirms its views or description. The article content is for reference only and does not constitute investment advice. Investors who act on it do so at their own risk.
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