On November 10, Monday, we noted that last Friday's strong US non-farm payrolls data had pressured gold prices, but the decline in US one-year inflation expectations, along with easing Middle East geopolitical tensions, pushed oil prices lower and softened inflation pressure, reducing the need for the Federal Reserve to keep raising rates aggressively, which in turn supported gold. In terms of trading, we suggested watching support at $4,080 and then $4,050, with resistance at $4,150 and, if broken above, $4,200.
Looking at the subsequent price action, during Monday's European session, gold stabilized after falling to $4,084 and then rebounded, reaching $4,130 at the US session open where it met resistance, then pulled back to $4,100 and stabilized, before rising sharply near the close to a daily high of $4,148. On Tuesday's open, gold tested slightly below $4,150 and remained capped, then drifted lower and is now at a daily low of $4,068. Overall, gold ran into resistance at the $4,150 level we identified and fell back, with its rebound still limited.
According to Wolfinance star analysts, gold rose on Monday to a new high in half a month, holding up despite last Friday's strong non-farm payrolls data, mainly because oil and the US dollar weakened together. Specifically, Middle East geopolitical tensions cooled for now, and Trump said that as long as US-Iran talks make progress, the US is very unlikely to resume large-scale military action against Iran. That statement directly drove the war premium in the crude oil market sharply lower, with Brent crude hitting a two-month low. The drop in oil prices eased concerns about persistent high inflation, which weakened the case for the Fed to keep raising rates aggressively. In addition, after last Friday's non-farm payrolls release, the US dollar index surged for a single day, but on Monday the dollar came under pressure and gave back most of Friday's gains. The simultaneous pullback in the dollar and oil provided important support for gold's rebound on Monday.
Looking ahead, the focus will be on the impact of tonight's US CPI data. The market currently expects CPI to ease from September. If inflation cools and reduces rate hike pressure, that will be favorable for gold; otherwise, it could pressure gold again. On the daily chart, after gold hit a two-week high, it ran into resistance and pulled back, continuing to trade in a high-level range. On the downside, support can be watched at the daily Bollinger middle band at $4,060, then near last week's high-low reversal low around $4,030, which is also near the weekly MA5, with further declines eyeing the $4,000 round number. On the upside, resistance can be watched at the $4,100 round number, where Monday's pullback stabilized before another push higher and where intraday losses accelerated the short-term decline, then at the $4,150 round number, where gold's rebounds have repeatedly been capped in recent days, with a break above eyeing the $4,200 round number. The 5-day moving average has turned upward in a golden cross, and MACD is also in a bullish golden cross, suggesting gold still has room to rebound. However, KDJ and RSI have started to turn down after golden crosses, implying that after failing to extend gains, gold may see a short-term pullback or consolidation.
Intraday reference for gold: Easing Middle East geopolitical tensions and falling oil prices have eased inflation concerns, weakening the need for the Fed to keep raising rates aggressively, while the US dollar index has also pulled back, providing support for gold. However, last Friday's strong non-farm payrolls data means market expectations for a December Fed rate hike remain high, limiting gold's rebound. In trading, it is advisable to treat this as a range-bound market. On the downside, watch support at $4,060 and $4,030. On the upside, watch resistance at $4,100 and $4,150. If tonight's non-farm data increases volatility, short-term traders can follow the momentum, with further downside focus at $4,000 and further upside focus at $4,200.
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