Market News: On October 31, gold prices continued their rebound this week, recovering from the low below $3,900 since October 6 and currently trading around $4,003. Concerns over a potential prolonged U.S. government shutdown have heightened investor risk aversion, providing support for the non-yielding asset. Meanwhile, the dollar's post-Fed rally has been restrained, creating conditions for gold's short-term stabilization. However, Fed Chair Jerome Powell emphasized that another rate cut in December is "not yet certain," a statement interpreted as hawkish, pushing U.S. Treasury yields higher and capping gold's rebound. Market surveys indicate that recent trade de-escalation agreements between the U.S. and Asian nations during the APEC meeting have reduced global risk aversion, weakening gold's safe-haven appeal. As trade tensions ease, investors are reallocating funds to risk assets, leading to some outflow from precious metals.
Technical Analysis: Gold closed with a solid bullish candle yesterday, ending a four-day losing streak. From a daily chart perspective, after Wednesday's bearish rejection candle, yesterday's bullish engulfing pattern was unexpected. Fundamentally, uncertainty over a December rate cut should have pressured gold further, allowing for a technical correction. Instead, prices consolidated and rebounded, forming a strong bullish candle even as the dollar also surged. This unusual behavior reflects highly complex market sentiment, with signs of emotional trading resurfacing. Given the current complexity, intraday gold is expected to trade sideways. While yesterday's rally shouldn’t be overestimated, traders should remain cautious, allowing 1-2 days for observation.
Today, resistance is seen near the 10- and 20-day moving averages at $4,070-80. Failure to break above this zone would limit yesterday's bullish momentum, keeping prices in a broader range. On the hourly chart, short-term resistance lies around $4,040-50. Support is initially at the 5-day moving average near $3,980. A drop below this level would suggest yesterday's rally was driven by market volatility rather than a sustainable trend reversal.
Trading Strategy: Intraday trading should focus on scalping within the $3,980–$4,050/60 range formed by moving averages. If prices break out of this range, adjust strategies accordingly. Aggressive traders may consider long positions near $4,003 in the afternoon, targeting $4,020-30.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Investors should conduct their own risk assessment before trading.