Gold prices fell during the Asian session on Thursday, mainly reflecting improved market risk appetite and lower safe-haven demand amid weak holiday trading. As market expectations for the Federal Reserve to cut interest rates again in December continue to rise, coupled with growing hopes for regional peace negotiations, global market trends have turned optimistic, prompting some funds to shift to gold instead of risk assets. U.S. economic data this week were mixed, but did not generally change the market’s assessment of the Fed’s policy path. Data from the U.S. Department of Commerce showed that durable goods orders increased by 0.5% in September, a significant slowdown from the previous 3.0%, but still higher than market expectations of 0.3%. Excluding transportation, orders rose 0.6%, indicating continued recovery in manufacturing. Gold prices fell slightly after rising earlier, mainly due to improved market risk appetite and rising expectations for peace negotiations. However, strong expectations of a rate cut by the Federal Reserve in December have put pressure on the US dollar and continued to support gold prices. Although various U.S. economic data have mixed performances, they have not weakened market expectations for interest rate cuts.

Many Fed officials have taken a decidedly dovish tone recently. New York Fed John Williams said that if the economy remains as it is, a rate cut will not affect the inflation target; while Fed Governor Waller said that the labor market is weak enough to support another rate cut. In this case, the U.S. dollar index fell to its lowest level in a week and remained an important supporting factor for gold. On the other hand, signs of improvement in the climate for regional peace talks have increased risk appetite. Multiple data showed that although negotiations still have a long way to go, external sentiment has improved, weakening gold’s safe-haven appeal. Overall, gold fundamentals point to a mix of “lower safe-haven demand and support from interest rate expectations.” Short-term fluctuations in gold prices are more due to market sentiment than trend reversal signals. Judging from interest rate expectations, US dollar trends and technical structure, this round of adjustment is similar to a natural adjustment in an upward trend. If subsequent economic data continues to support interest rate cut expectations, gold prices can still resume their upward trend after rebounding to key support levels. But it’s worth noting that fluctuations in the prospects for peace talks could lead to further volatility. There are no major data or events to watch today. The gold market will close two hours earlier due to the U.S. Thanksgiving Day. Gold price analysis: During yesterday’s US trading session, the price of gold began to fall after hitting a level near 4173. Yesterday we identified the 4170-75 resistance level, which is a major resistance level that we have emphasized in the past two days. If this level continues to act as resistance today, the downward momentum is likely to continue. Gold prices fell slightly this morning to around 4140, and then consolidated in a narrow range. This morning’s pullback may be temporary. We continue to monitor the resistance level to see how far it might fall.

From the 4-hour chart, the triangle consolidation pattern of gold prices has not changed, with the downward trend line providing resistance at 4173-75. Only a decisive break above this line can bring further gains and new opportunities. Otherwise, it will remain in the integration phase. On the hourly chart, the price has begun to fall below short-term support and is currently facing pressure from the short-term moving average. There may be room for adjustment in the short term; therefore, short-term adjustments should be monitored. Today, continue to focus on the resistance level of the upper trend line of the triangle pattern, which also represents the boundary between bulls and bears. If resistance persists, expect a pullback. Therefore, you should still try to open a short position today. If it rebounds to around 4168-73, we can sell short. In short, today’s short-term gold trading strategy is mainly to sell on highs. The main short-term resistance level is 4173-4175, and the main support level is 4110-4100. Please continue at this pace.

Source link