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On October 16, yesterday Thursday, we believed that the U.S. CPI data released on Wednesday came in higher than expected, which briefly pressured gold prices. However, the CPI rebound was mainly driven by rising energy prices, making it difficult for the Federal Reserve to immediately raise rates aggressively on that basis. Extreme hawkish expectations in the market quickly faded, and the dollar and Treasury yields retreated from their highs, supporting gold prices to halt their decline and rebound, maintaining range-bound movement. Therefore, in terms of trading, we suggested paying attention to support at $4,100, followed by $4,070, and resistance at $4,160, followed by $4,200.
Looking at the subsequent price action, during yesterday Thursday's Asian session, gold rebounded to $4,161 before encountering resistance, then pulled back to $4,131 where it stabilized. During the European session, it rebounded again to $4,160 before facing resistance. After the U.S. session opened, gold fell back to $4,130 where it stabilized, then rebounded to $4,168 before encountering resistance. Near the close, gold prices surged in the short term, rising to $4,177 before facing resistance, thereby completely recovering all of Wednesday's losses. Overall, gold rebounded from a one-week low, continuing to maintain range-bound consolidation.
Wolfinance star analyst believes that the U.S. CPI data released on Wednesday came in higher than expected, causing gold prices to initially plummet, but they quickly stabilized and rebounded. The PPI data released on Thursday also continued to come in higher than expected, and gold similarly fell first before rising. The key lies in the market interpreting the inflation data as a stagflation signal rather than a pure rate hike signal.
Specifically, after the CPI data was released, the probability of a Fed rate hike in December quickly rose from 21% to nearly 50%. Extreme hawkish market expectations pushed the dollar and Treasury yields sharply higher, but this rally did not last long before encountering resistance and retreating. This is because the CPI increase was mainly driven by energy prices—an external geopolitical shock rather than endogenous inflation from an overheating U.S. economy. The Fed may not rush to raise rates because of this. The probability of an October rate hike quickly fell back, and the dollar and Treasury yields declined in tandem. The PPI data released on Thursday similarly failed to significantly strengthen October rate hike expectations.
In addition to the decline in the dollar and Treasury yields, Asia-Pacific stock markets plunged across the board on Thursday, and risk-averse sentiment in the stock market also provided a supporting effect, helping gold prices stage a rebound.
On the daily chart, gold rebounded from a one-week low, continuing to maintain the range-bound movement of the past half month. For gold's downside support, attention can be paid to the $4,130 level where gold prices consolidated during the Asian and European sessions after rebounding and encountering resistance on Thursday—gold repeatedly pulled back here and stabilized—followed by the $4,100 round number level. For gold's upside resistance, attention can be paid to the $4,190 level near the daily Bollinger Band middle track, followed by the $4,230 level near the recent half-month rebound high.
The 5-day moving average has formed a slight golden cross with a mild downward turn, the MACD indicator shows a slight golden cross, the KDJ indicator shows a golden cross pointing upward, and the RSI indicator shows a golden cross with a slight downward turn. In the short term, technical indicators suggest gold has room for a rebound, though the rebound signal remains relatively weak.
Gold intraday reference: U.S. CPI and PPI data came in higher than expected, but the market interpreted the inflation data as a stagflation signal rather than a pure rate hike signal. The dollar and Treasury yields retreated from their highs, supporting gold prices to halt their decline and rebound. In terms of trading, a range-bound approach is recommended, with downside support to watch at $4,130 and $4,100, and upside resistance to watch at $4,190 and $4,230.
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