Gold prices staged a dramatic reversal on Tuesday, initially slipping to an intraday low of $4,290 before rallying to erase all losses and closing at $4,357 with a small bullish candle. The session played out like a rollercoaster, with early gains fading into a sharp midday drop before buyers stepped in during the afternoon to reclaim lost ground.
Heading into Wednesday's trading, the market finds itself in a stalemate. Gold is stuck in a tug-of-war, with rate hike expectations, a firm US dollar, and elevated real interest rates pulling prices lower, while central bank buying, geopolitical tailwinds, and dip-buying provide support from below. Neither side has managed to gain the upper hand, leaving prices locked in a sideways range that offers little directional clarity.
The key takeaway from the recent price action is that gold's failure to break down after the rate decision points to a classic "sell the rumor, buy the news" dynamic. The market's focus has shifted from whether the Fed will hike this month to whether this marks the final move of the cycle. Odds for another 25-basis-point increase in October hover around 56 percent—above a coin flip, but far from a sure thing.
The pressure on gold may be easing, but it has not yet lifted entirely. From a technical perspective, the overnight rebound has reduced the bearish bias and suggests a shift toward broader range-bound trading. On the hourly chart, resistance is seen near the $4,370 level, with a middle zone around $4,340-$4,330, and support extending to the $4,310-$4,305 area. Prices are likely to oscillate within this band, with downside bias depending on incoming fundamental drivers.
The broader picture remains a $4,250-$4,400 box, and today's session is unlikely to deliver a breakout. Traders are advised to stick to range-bound strategies rather than chase directional moves, waiting for clearer signals from upcoming official speeches. For those looking to position, the comfort level for longs near $4,300-$4,290 is far higher than chasing prices above $4,400. A sustained break above $4,400 would be required to justify any trend-following position.
The immediate trading recommendation is to go long in the $4,300-$4,305 area with a stop loss at $4,290 and targets toward $4,260-$4,270. Key data to watch today includes the US S&P Global Manufacturing and Services PMI flash readings for September at 21:45 Beijing time, along with Fed Governor Barr's comments on housing at 22:05.
This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research and assume full responsibility for their trading decisions.
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