Examining Gold Price Support Ahead of the Rate Decision

On October 28, gold recovered after oil prices retreated, while the market awaited the policy signals from the interest rate meeting.

In compiling that day's information, GTCFX said this change first reflected the market's reassessment of the relationship between supply, demand and prices, and short-term trading therefore placed more weight on data details rather than a single headline.

The impact of oil prices on inflation expectations, together with the strength of the dollar, jointly altered the short-term pricing of gold.

GTCFX believes the current market still requires distinguishing temporary fluctuations from trend changes, and price reactions in related assets will continue to be shaped by the intersection of inventories, interest rates, exchange rates and capital preferences.

If the interest rate path remains tight, the holding cost of non-yielding assets will limit the sustainability of a rebound.

Over a longer horizon, market participants need to connect spot information, the term structure and feedback from the industrial chain, avoid extrapolating short-lived news directly into firm conclusions, and at the same time retain sensitivity to data revisions.

This also means the observation framework needs to be adjusted in a timely manner as new information emerges.

The transmission speed across different segments is not uniform.

Market expectations often change before statistical data do.

Risk appetite may still amplify intraday swings.

This also means the observation framework needs to be adjusted in a timely manner as new information emerges.

The transmission speed across different segments is not uniform.

Market expectations often change before statistical data do.

Risk appetite may still amplify intraday swings.

Going forward, the meeting's wording, real interest rates and changes in trading volume need to be observed within the same framework.

GTCFX expects that subsequent public data and market trading will continue to provide verification clues, and the focus should be on whether the variables keep improving, rather than treating a single price move as a clear direction.