On October 27, during the recent trade discussions held in Kuala Lumpur, Malaysia, U.S. and Chinese representatives reached a preliminary consensus on several important trade topics, igniting optimism in the market. Li Chenggang, China's Deputy Minister and international trade negotiator, stated after the talks that both parties would follow their domestic approval processes and enhance communication to strengthen the hard-won U.S.-China trade relationship. This development suggests a potential easing of the recent volatility in U.S.-China trade relations, as the rigid stance of the U.S. government meets China's firm interest protection in a dialogue based on mutual respect and equality. Additionally, U.S. officials revealed that President Trump intends to focus on trade relations in his meeting with Chinese President Xi Jinping this week, which may touch on other subjects. These positive signals quickly diminished gold's appeal as a safe-haven asset, resulting in a significant drop in gold prices at Monday's market open.

Amid the shifting global economic landscape, gold, traditionally viewed as a safe-haven asset, faces various opposing pressures. On Monday (October 27) morning, the spot gold price plummeted nearly $50 to $4063.80 per ounce, reflecting not only a burst of market sentiment but also a confluence of factors including the international trade situation, geopolitical dynamics, monetary policy expectations, and stock market performance. Although gold prices are under notable pressure in the short term, and bullish sentiment appears to have cooled, support from the Federal Reserve's potential rate cuts and lingering geopolitical risks leave investors cautiously optimistic about gold's long-term trajectory.

Regarding gold’s performance, after hitting a new high of 4381 last week, it entered a correction mode. On Tuesday and Wednesday, the price sharply declined, reaching a low of around 4004 before fluctuating within a tight range near the moving averages. Although Friday's U.S. CPI data prompted a brief rebound, it fell back again overnight, closing with a small bearish star candlestick. Moreover, the weekly chart recorded a large bearish candle, marking the first significant decline following nine consecutive weeks of extreme gains. The weekly top divergence has been digested; despite the price correction hitting the 5-week moving average, further downside potential remains. This week, if gold falls below the 5-week moving average at 4070, a retreat towards the weekly support near 3850 could be anticipated.

From a daily perspective, after the sharp declines on Tuesday and Wednesday, gold traded within the moving average range for three consecutive days. The CPI data on Friday did not propel the price outside this range, leaving the overall structural focus biased to the downside. Additionally, the downward movement of the 5-day moving average has further tightened the bearish outlook for gold following today’s opening. A rebound attempted near the 5-day line around 4110 was unsuccessful, with the price returning to hover around the 20-day line at 4070, increasing the likelihood of further corrective adjustments.

Fundamentally, this week’s key event will be the Federal Reserve's interest rate decision on Thursday, with market expectations of potential rate cuts influencing gold's future price dynamics. If gold remains above the 4000 level during the first half of the week, the market may decide on a direction based on the Fed's rate decision in the latter half. An upward move might target the 10-day line near 4180, while a downward shift could lead to potential retracement to 3950/3900, or even as low as 3850-3800, though the latter scenario is less likely unless the Fed adopts a more hawkish policy.

Considering daily and hourly trends along with fundamental perspectives, gold is expected to maintain a weak adjustment stance early this week. Watch for resistance near the 5-day line around 4100; failure to break above could lead to further weakening overall. Below, monitor the situation around the 20-day line at 4070, where breaking through seems probable, particularly keep an eye on the significant 4000 psychological support level. Should it fall below this mark in the first half of the week, it may trigger market speculations about the Fed not cutting rates, thereby exacerbating the risk of further declines.

Trading strategy: Consider short positions near 4100, placing stop-loss at 4112, and aiming for a breakdown below 4070 to maintain the position. Additional intraday levels will be provided as needed.