Gold losses deepen, approaching key support; battle between Metfa

Market summary: Gold continued its decline in the European market on Friday (November 21), currently trading around US$4,048 per ounce, down nearly US$30 on the day! Gold prices remain under pressure below $4,100, mainly due to growing market expectations that the Federal Reserve will maintain a hawkish stance, weakening gold’s appeal as a non-yielding asset. Although yesterday’s non-farm payrolls data looked better than expected, the details pointed to a weak labor market and gold prices were only briefly higher. Since then, U.S. stocks rose first and then fell, and Asian stock markets fell, causing gold prices to also fall. The current debate in the market is whether gold will regain its value along with equity assets, or whether it will regain its upward momentum as a safe-haven asset that was “accidentally sold off”. The answer still requires guidance from technology and data analytics. 📉📈

Main focus:
1️⃣There are divergences in Fed policy:
Minutes of the Federal Open Market Committee’s (FOMC) October meeting showed that members had significant disagreements over whether to cut interest rates in December. Two committee members even voted against a rate cut: one called for a 50 basis point cut and the other called for stabilization. All members reiterated their commitment to achieving the dual goals of “full employment + 2% inflation”, but were concerned that consecutive interest rate cuts may increase long-term inflation expectations and offset previous anti-inflation results. Powell has previously emphasized that a rate cut in December is “not a foregone conclusion” and that there is still uncertainty about the policy path.

2️⃣ Market sentiment and opportunity cost
Fluctuations in interest rate cut expectations directly increase the opportunity cost of holding gold, putting downward pressure on gold prices. While heightened volatility in global equity markets should theoretically boost safe-haven demand, gold is currently driven more by real interest rates and the U.S. dollar, resulting in stronger short-term correlations with risk assets.

technical analysis

🔍 Trend Forecast: Shorts dominate, price consolidates awaiting breakthrough

The price of gold began to correct from US$4,381, rebounded to around US$4,130 this week, and then encountered new resistance, confirming that this rebound was not a reversal.

Gold prices are currently oscillating between $4,000 and $4,100, but its structure is bearish. A break below $4,000 could trigger further declines towards support between $3,980 to $3,950, or even $3,915.

The main resistance is at the $4,100 and $4,110 zones. Only a strong breakout of this range will be enough to relieve downward pressure and test the upper edge of the triangle consolidation pattern.

Trading Strategy 🎯: Sell on rallies, be careful when trying to take advantage of price rallies.

Short position: Sell in batches at $4070-4075, stop loss at $8, target $4040-4020, and then break through $4,000.

Long positions: Consider establishing a small long position at $4000-4005, with a stop loss of $8 and a target of $4030-4050.

(Note: The specific entry point may vary due to spot market fluctuations. Discussions and updates are welcome!)