On October 30, yesterday Thursday, we believed that although falling oil prices eased inflation concerns and the US dollar index declined in tandem, providing short-term support for gold's rebound, the market still maintained high expectations for a Federal Reserve rate hike in December, which formed a key suppression on gold and limited the height of its rebound. Therefore, in terms of operations, we suggested that upside resistance should be watched at $4,080, followed by $4,100 and $4,120, while downside support should be watched at $4,035, followed by $4,000 and $3,975.
Looking at the subsequent price action, after the Asian session opened on Thursday, gold fell directly from $4,069 to stabilize at $4,036. After rebounding to $4,068 and encountering resistance, gold continued to face downward pressure. During the European session, it fell to $4,015 and stabilized there. During the US session, gold further explored new lows, dropping to $4,005 before stabilizing. Overall, gold's rebound was limited, and after hitting resistance, it resumed its decline, temporarily stabilizing at the $4,000 support level we had identified, with the price action largely in line with expectations.
According to Wolfinance star analysts, gold came under pressure on Thursday mainly because strong US economic data further fueled market expectations for a Federal Reserve rate hike in December. Specifically, the US third-quarter GDP data released on Thursday showed a quarter-over-quarter growth of 3.4%, exceeding the expected 3.2% and the previous reading of 2.2%. Third-quarter personal consumption expenditures grew for the second consecutive quarter and also beat expectations. The September PCE data showed the year-over-year increase accelerating from 3.4% to 3.6%. The strong US economic data and stubborn inflation mean that although the Federal Reserve held steady this week, the threshold for a December rate hike has been further lowered. Currently, CME data shows the probability of a December rate hike is as high as 70%, which directly suppresses gold prices.
On the daily chart, gold bounced off a three-month low, refreshed a one-week high, and then encountered resistance and pulled back again, with the rebound height being limited. For gold's upside resistance, attention can be paid to the daily 5-day moving average at $4,040, which was also the high point of gold's rebound during Thursday's European session, followed by $4,070 where gold's rebound met resistance twice during the Asian session. For gold's downside support, attention can be paid to the $4,000 integer level, where gold stabilized after coming under pressure on Thursday, followed by the recent three-month low of $3,975 and the recent one-year low of $3,943.
The 5-day moving average shows a death cross with a slight upward turn, the MACD indicator shows a death cross turning downward again, and the KDJ and RSI indicators show death crosses pointing downward. The short-term technical picture suggests that bears have the upper hand in gold, with risks of further declines. Intraday gold reference: Strong US economic data has further strengthened market expectations for a Federal Reserve rate hike in December, suppressing gold prices. In terms of operations, it is recommended to adopt a range-trading approach. Upside resistance can be watched at $4,040 and $4,070, while downside support can be watched at $4,000 and $3,975, followed by $3,943.
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