On October 21, market expectations for a December rate hike by the Federal Reserve remain near 92% to 94%, and although the October meeting is widely expected to hold steady, the view that the tightening cycle is far from over continues to weigh on non-yielding assets.
Elevated oil prices are intensifying inflation concerns, further strengthening the dollar's appeal as a safe haven, and gold is struggling to attract buying support under the dual pressure of higher rates and a stronger dollar.
Gold extended its decline during Wednesday's Asian session, hitting a fresh low of 4,106, with a fourth consecutive bearish daily candlestick and a bearish weekly candle confirming a clear downtrend.
The four-hour SAR parabolic indicator on the dollar index has flashed a bottom signal, and the daily Z-turn indicator has also bottomed in sync, with the technical confluence pointing to the start of a dollar rebound cycle that directly suppresses gold prices.
On the technical side, 4,138鈥?4,148鈥?4,155 forms a short-term resistance band, while 4,090 below serves as the first support level, with the strength-to-weakness transition zone to watch at 4,076鈥?4,066.
Once 4,066 is effectively broken, downside room will fully open up, and in the near term there will be no visible bottom below; in the face of a major trend, looking for support has limited meaning, and selling rallies remains the dominant strategy, with operations favoring shorting on rebounds as the main approach and buying dips as a supplement.
Gold Reference Strategy: The current spot price is around 4,120.
1. Short in batches on rebounds to 4,138鈥?4,148, stop loss at 4,160, targets 4,115鈥?4,090, hold if broken below; 2. Go long in the 4,076鈥?4,066 zone, stop loss at 4,160, targets 4,100鈥?4,125; 3. Go long at the monthly middle band of 4,040 (plus or minus 2 points), stop loss at 4,030, targets 4,052鈥?4,065.
Crude oil rebounded during Wednesday's Asian session, with WTI trading near $98.8 and Brent climbing to $111.2, the highest since May 20.
Although the expected rally did not materialize early in the week, the upward trend structure remains intact, and geopolitical risk premium remains the core driver.
In addition, API data showed U.S. crude inventories fell by 4.93 million barrels, with the SPR dropping to its lowest since 1982, signaling continued tightening on the supply side.
On the technical side, the one-hour Bollinger lower band at 96.5 and yesterday's low of 95.2 form a bullish support zone below, while resistance above is focused on the pressure band formed by the four-hour Bollinger upper band at 100.5 and yesterday's high of 101.3.
As long as this resistance area is effectively broken, upside room will further open up and new highs can be expected.
Operations should maintain a buy-on-dips approach, with key focus on the official tone of U.S.-Iran negotiations and marginal changes in Strait of Hormuz traffic volumes.
Crude Oil Reference Strategy: The current spot price is around 98.6.
1. Go long on a pullback to 96.7, stop loss at 96, targets 98.5鈥?00.5鈥?01.8, hold if broken above; 2. Go long at 95.5 below, go long at 94.5, stop loss at 93.5, targets 98.5鈥?00.5鈥?01.8, hold if broken above.
Sprott Physical Gold Trust (PHYS) is a physically backed gold trust that provides investors with exposure to gold bullion without the need for direct storage.
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