On October 28, gold staged a clear short-term reversal in yesterday's session, essentially ending the prior stretch of persistent weakness in which prices fell on every rally and formally shifting into a bullish upswing.
For some time before that, gold had been grinding lower in a choppy decline, and our range-trading approach of selling into strength proved very steady. But with prices unable to fall any further over two consecutive days and the lows holding firmly, the bottoming signals below became increasingly obvious, and the market quietly began building energy for a rebound.
That buildup finally paid off late yesterday, when the market delivered the strong surge everyone had been waiting for. It marked a rare lopsided victory for the bulls, and the overall rhythm of the move is now fairly clear, with upside momentum holding firm.
In fact, the single most important driver behind this rebound and strengthening in gold prices is the easing of geopolitical tensions. Multiple Middle Eastern countries have opened peace talks with Iran, and the market's nervous safe-haven sentiment has cooled rapidly. That removed the pressure pushing gold lower and instead fueled a rise in optimistic sentiment, giving gold ample upward momentum.
Yesterday's pullback in gold was also extremely shallow, with the metal dipping only to around 3990 before halting its decline, which further confirmed the solid foundation under the bulls. Our overall low-price long positions then landed precisely on that low, and after the good news on the talks gained traction during the U.S. session, gold broke through the key resistance above and surged all the way to around 4070, delivering a solid gain of sixty to seventy points in a single move.
With gold having now established a short-term uptrend, today's overall bias remains tilted to the upside, and any modest intraday pullback is merely normal consolidation rather than a return to weakness.
That said, what we need to focus on next is the Federal Reserve's interest rate decision in the early hours, which is highly likely to leave rates unchanged. The key point to watch will be officials' follow-up remarks, since those comments will directly shape the pace of gold's moves in the evening and serve as the crucial barometer for whether the market turns bullish or bearish from here.
Today's short-term trading approach is actually fairly straightforward, with the overall stance still favoring buying on dips in line with the trend while treating short-selling as secondary.
Now that gold has just completed a powerful rally, the market is unlikely to offer another deep pullback for bottom-fishing in the short term, so there is no need to stubbornly wait for an extreme low. During the day, we can build long positions in batches within the 4030-4040 zone, with a unified stop-loss below 4020, and look for short-term upside toward the 4065-4075 resistance area. If the market continues to break above the 4070 high, we can also chase long positions accordingly, and only consider a small short bet on the first touch of the extreme resistance around 4095-4100.
Going forward, the main trading logic should center on building long positions around the core support at 3990-4010, staying with the trend and going long as long as that key support holds.
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