On Tuesday, October 27, international gold prices staged a volatile rebound, gaining about 1% over the course of the day. The metal dipped to a low of $3,990 during intraday trading before mounting a strong recovery. The core driver behind this rebound was the pullback in crude oil prices: falling oil eased inflation concerns in the market, prompting investors to reprice hawkish expectations for the Federal Reserve's upcoming policy moves, which provided temporary support for gold prices. Whether gold can hold above the $4,000 mark in the near term and open up further upside will depend largely on the Fed's meeting language and Thursday's PCE inflation data. If the data confirms easing inflation pressure while the Fed strikes a cautious tone, the gold rebound could continue; however, if inflation proves stickier than expected and the Fed maintains a hawkish stance, gold prices may retreat again to test lower support levels.
With no major data releases on Tuesday, gold and silver delivered a notable rebound as expected, with gold testing the $4,070 level 鈥?a key dividing line between bulls and bears. Looking ahead, two major areas deserve close attention: first, the technical picture, where gold is showing early signs of bottoming out, and the key question is whether rebounding momentum can be sustained; second, fundamentals, with tonight's Fed interest rate decision in focus. Whether rates are hiked, the size of any increase, adjustments to the dot plot, and whether officials provide forward guidance on future rate hikes are all core variables for this market move.
My view remains unchanged: after the market fully digested rate hike expectations in October, gold is poised for a strong rally in November, and we await market confirmation. Today's price action can be divided into two phases: the Asian and European sessions trading on expectations, and the US session absorbing the impact of the Fed decision, where volatility will expand significantly. Tuesday's rally has laid a foundation for gold's bottom. On the daily chart, consecutive bullish candles at low levels have broken through moving average resistance, and the lower Bollinger Band is gradually contracting, suggesting bulls still have room to push higher. Once gold effectively holds above $4,070, it will challenge resistance near $4,120. On the 4-hour chart, the bottoming pattern is clear, and the rebound has broken above the upper Bollinger Band, opening the possibility of a one-sided upward move today. However, caution is warranted: $4,070, as a previous top-bottom conversion level, has not yet been firmly reclaimed, so it cannot yet be defined as a strong bullish trend.
In terms of trading strategy, it is advisable to prioritize observation during the Asian and European sessions, and wait for the price to stabilize above $4,070 before following up on pullbacks with a bullish view, targeting $4,120 and $4,150. Today, gold faces resistance at $4,070-$4,120 on the upside and support at $4,030-$4,000 on the downside. Finally, a word on the midnight Fed decision and my forecast: the Fed will most likely not hike rates immediately this time but will retain hawkish language regarding future hikes. The US dollar is expected to weaken slightly, and gold has an opportunity to spike toward $4,150.
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