On October 23, yesterday Thursday, we believed that continued oil price increases are intensifying inflation concerns, providing support for the Federal Reserve to maintain its tightening policy. This raises the opportunity cost of holding gold, and with October rate hike expectations cooling and already fully digested by the market, while December rate hike expectations remain elevated, a subtle situation has formed where good news exhausted becomes bad news, putting pressure on gold prices. Short-term technical indicators also show that gold faces further downside risk. Therefore, in terms of trading, it is recommended to watch resistance at $4,100 and $4,140, and support at $4,040 and $4,000.
Looking at the subsequent price action, during Thursday's European session, gold fell to $4,057 and stabilized. After the US session opened, it rebounded to $4,091 but met resistance. Gold then fluctuated lower, and near the close, it dropped to $4,021 and stabilized, hitting a near three-month low. Overall, after gold lost the $4,100 integer level, the short-term decline accelerated, further probing new lows, which is basically consistent with our expected direction.
Wolfinance star analyst believes that Thursday's accelerated gold decline was mainly driven by multiple bearish factors. Specifically: First, high interest rate expectations are exerting key pressure on gold prices. Although market expectations for a Fed October rate hike have cooled, the probability of a December rate hike is as high as 90%, which weakens the appeal of holding gold. Second, Middle East geopolitical tensions are driving continued oil price increases, and rising inflation expectations are forcing the Fed to maintain or even intensify its tightening policy, pushing real interest rates higher. Third, continuous sharp declines in Asia-Pacific stock markets have led to liquidity demands that caused gold to be sold off. Fourth, gold breaking below the key $4,100 support triggered some stop-loss orders and programmatic selling, amplifying the short-term decline.
Looking ahead, with Fed October rate hike expectations cooling and December rate hike expectations elevated, a subtle situation has formed where good news exhausted becomes bad news. Under pressure from high interest rate expectations, gold's upside potential is limited, and it can only passively bear the pressure. On the daily chart, gold has been under continuous pressure this week, hitting a new low in over two months, with short-term performance showing weakness. For gold's downside support, attention can be paid to the $4,000 integer level, followed by the one-year low of $3,943. For gold's upside resistance, attention can be paid to the daily Bollinger Band lower rail at $4,050, followed by the Thursday US session rebound high near $4,090. The 5-day moving average has formed a death cross pointing downward, the MACD indicator has formed a death cross pointing downward, the KDJ indicator has formed a death cross pointing downward, and the RSI indicator has formed a death cross with a slight upward turn. Short-term technical indicators show that bears are dominant, and gold faces further downside risk.
Gold intraday reference: With elevated Fed December rate hike expectations and continued oil price increases intensifying inflation concerns, providing support for the Fed to tighten policy, gold prices continue to face pressure under high interest rate expectations. In terms of trading, it is recommended to adopt a range-trading approach, watching resistance at $4,050 and $4,090, and support at $4,000 and $3,943.
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