On September 29, Monday, we noted that after the Fed announced its rate hike in September, Fed officials delivered a series of hawkish remarks, which continued to heat up market expectations for further rate hikes within the year, directly pressuring gold prices. Short-term technicals also indicated that gold faced the risk of further pullback. Therefore, in terms of trading, we suggested watching upside resistance at $4,300, followed by $4,342, and downside support at $4,254, followed by $4,235 and $4,200.
Looking at the subsequent price action, after the Asian session opened on Monday, gold tested the $4,254 support multiple times before breaking below it and plunging $25 in a short-term dive. It then continued to face downside pressure, losing the $4,200 round-number level. After a brief rebound that was capped multiple times at $4,200, gold resumed its decline, dropping to $4,140 in the European session where it stabilized. A rebound to $4,171 was blocked, and after the US session opened, gold continued to fall, hitting a daily low of $4,110. A rebound to $4,148 was capped, and before the close, gold once again dipped to $4,111 where it stabilized.
Overall, gold broke downward shortly after the open and began a continuous decline, largely consistent with our judgment that gold faced further pullback risk, though the short-term performance was somewhat weaker than we had expected. Wolfinance star analyst believes that Monday's sharp drop in gold prices, which hit a more than one-month low, was mainly the result of multiple bearish factors converging. Specifically: on one hand, after the Fed announced its September rate hike, Fed officials continuously released hawkish signals, the dot plot also suggested one more rate hike within the year, and PMI data significantly beat expectations. US consumers' inflation expectations for the next year jumped from 4.0% to 4.6%, further reinforcing the market's view that the Fed will tighten policy. This supported the dollar and Treasury yields, directly pressuring gold prices. On the other hand, gold's safe-haven logic failed. Middle East geopolitical tensions pushed oil prices higher, reigniting market concerns about inflation, but this reinforced the logic for the Fed to continue raising rates, causing safe-haven funds to not flow into gold. Instead, expectations of the Fed's high rates suppressed gold prices.
On the daily chart, after gold's rebound was capped, it oscillated under pressure last week and fell further after this week's open, showing a weak short-term performance. For downside support, watch Monday's low of $4,110, where gold stabilized multiple times during the day. If gold comes under further pressure and breaks below the $4,100 round-number level, short-term pullback risk will increase further, and attention can turn to the August low of $4,020. For upside resistance, watch the daily Bollinger Band lower rail at $4,150, which is also near Monday's US session rebound high, followed by Monday's European session rebound high of $4,170, and the $4,200 round-number level. After gold broke below this level during Monday's Asian session, it rebounded to test it multiple times only to be capped and continue falling. The 5-day moving average has formed a death cross pointing downward, the MACD indicator has a death cross pointing downward, the KDJ indicator has a death cross pointing downward, and the RSI indicator shows a death cross with a slight upturn. Short-term technicals indicate that sellers hold the advantage and gold faces the risk of further pullback.
Gold intraday reference: Market expectations for further Fed policy tightening support the dollar and Treasury yields, continuing to pressure gold prices. In terms of trading, a range-bound approach is suggested, with upside resistance at $4,150 and $4,170, followed by $4,200; downside support at $4,110 and $4,100, with a break below pointing to $4,020. Sina partners with major platforms for futures account opening — safe, fast, and secure. Sina disclaimer: This message is reproduced from a Sina partner media outlet. Sina publishes this article for the purpose of conveying more information and does not mean it agrees with or confirms its views or descriptions. The article content is for reference only and does not constitute investment advice. Investors who act on this do so at their own risk.
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