On September 30, yesterday Tuesday, we believed that the market's expectations for further Federal Reserve rate hikes supported the strength of the dollar and U.S. Treasury yields, which put pressure on gold prices. Short-term technicals also showed that gold faced the risk of continued decline. Therefore, in terms of operations, we suggested paying attention to upside resistance at $4,150 and $4,170, followed by $4,200, while downside support should be watched at $4,110 and $4,100. If there is a downward breakout, continue to watch $4,020.
Looking at the subsequent price movement, after the Asian session opened yesterday Tuesday, gold pulled back slightly to stabilize at $4,113, then began to rebound. During the Asian and European sessions, it rose to $4,161 before encountering resistance. After the U.S. session opened, it continued to rebound to $4,175 before facing resistance, then pulled back to $4,142 and stabilized. Before the close, it further rebounded to $4,185 before meeting resistance. After the Wednesday open, gold pulled back to $4,165 and stabilized, rebounded to $4,202 before facing resistance, and is currently trading near $4,179.
Overall, gold failed to continue its downward breakout and stabilized and rose near our given support at $4,110, reaching the target resistance level of $4,200. The short-term trend was basically in line with expectations.
According to Wolfinance star analyst, gold's rebound on Tuesday was mainly driven by multiple news factors. First, Federal Reserve officials gave dovish speeches. Williams explicitly stated that after the September rate hike, there was no need to rush to act. If the economic trend meets expectations, there may be one more rate hike within the year, which could push inflation back to the 2% target. This cooled market expectations for further Fed tightening, with the probability of an October rate hike dropping from 70% to 50%. Second, crude oil prices fell back, approaching a one-month low, easing market concerns about energy prices continuing to push inflation higher. Third, the latest U.S. economic data was poor. The September consumer confidence index fell to a nearly 12-year low, and the August job openings data also fell short of expectations. This made the Federal Reserve more cautious about continuing to tighten policy, providing support for gold prices.
On the daily chart, after continuous pressure, gold stabilized and rebounded above the $4,100 integer level, easing short-term downward pressure. For downside support, pay attention to the intraday low of $4,165, followed by the pullback low of $4,142 during the U.S. session on Tuesday, and the $4,110 level where gold repeatedly stabilized and rebounded earlier in the week. For upside resistance, pay attention to the $4,200 integer level, which is also near the intraday high, as well as the daily 5-day moving average. Next, watch the $4,235 level, which was gold's low over the past month or so before this week's downward breakout. The 5-day moving average has formed a death cross pointing downward, and the MACD indicator has also formed a death cross pointing downward, indicating that bears continue to hold the advantage. The KDJ and RSI indicators have turned upward from death crosses, suggesting that after continuous pressure and stabilization, gold has a need for a rebound correction.
Intraday gold reference: The relatively dovish speeches from Federal Reserve officials have cooled market expectations for an October rate hike, supporting a rebound in gold prices. However, expectations for one more rate hike within the year limit the room for further gold rebounds. In terms of operations, it is recommended to adopt a range-bound approach. Downside support can be watched at $4,165, followed by $4,142 and $4,110. Upside resistance can be watched at $4,200 and $4,235.