On Monday (November 17), gold continued its decline from the previous two trading days, falling to around $4080. Despite a drop of over 2% on Friday, gold successfully rebounded from its lows, still recording a 2% gain for the week, its first weekly increase in three weeks. This performance demonstrates its remarkable resilience—even with at least two negative factors—the end of the government shutdown and the trade truce—fading. While Friday's decline seemed to finally break through gold's resilience, its weekly performance shows its strength remains solid, and key technical levels have not been breached. However, will gold face real pressure this week, thus shifting the outlook to bearish?
Although international macroeconomic indicators such as the global PMI data to be released on Friday may indirectly affect gold prices through the dollar channel, the market focus will be entirely on the US economy. With the US government reopening, although some indicators missing due to data collection during the shutdown will not be released, we can expect to see the release of other macroeconomic data soon—including the September jobs report excluding the unemployment rate. It's worth noting that recent statements from Federal Reserve officials have become slightly hawkish. According to CME's "FedWatch," the probability of a 25 basis point rate cut by the Fed in December is 44.4%, while the probability of keeping rates unchanged is 55.6%. The probability of a cumulative 25 basis point rate cut by the Fed by January is 48.6%, the probability of keeping rates unchanged is 34.7%, and the probability of a cumulative 50 basis point rate cut is 16.7%. Furthermore, geopolitical uncertainty may support gold prices this week. Gold itself does not generate interest and typically performs well in low-interest-rate environments, and is also considered a safe haven during periods of economic uncertainty. With the end of the US government shutdown, investors are awaiting clearer information on how the backlog of economic data will be processed and how this data will reflect the state of the US economy. The two most significant factors are the reopening of the US government and the trade truce agreement—two risk-averse developments that should have weakened the demand for gold as a safe haven, but so far, have not been fully reflected in gold prices, seemingly suggesting that the market is still betting on continued gold purchases by central banks. However, it's important to be wary that this assumption itself carries risks, as even central banks may remain cautious about the current overheated gold prices.
Gold Price Trend Analysis: Despite the decline last Friday, gold still closed higher for the week, indicating that bullish sentiment currently dominates the market. What's somewhat surprising is the resilience gold has shown despite facing multiple negative factors. After a sharp drop last Friday, gold rebounded from around 4032, then encountered resistance again around 4111 during the US session. Today's opening saw no significant price swings, only range-bound trading as expected over the weekend. If the bulls don't make a major upward move this week, it's almost certain that a major weekly correction is about to begin. Note that the previous weekly gains were substantial, meaning the technical correction could be significant. My strategy for this week remains to sell on rallies. We identified a sharp drop signal on Friday and placed short orders at 4210 and 4183. The 4183 short order triggered a sharp, one-sided decline. The first major support level for gold's current correction is around 4000. Today we will rely on minor resistance levels to short, as a significant correction is needed after the sharp drop.
Let's briefly review the overall trend of gold in the Asian session. It's basically in line with my prediction: a range-bound, oscillating pattern, fluctuating within a certain range. The 4110 level is clearly a significant resistance, having failed to hold above it several times. The 4050 level has provided relatively strong support, becoming a support level for the day. Our main strategy for the European session is to continue shorting on rallies. If the decline continues, we'll look towards the $4000 psychological level, or even lower, the $3930-$3887 area. In summary, today's short-term trading strategy for gold is to primarily short on rallies, with buying on dips as a secondary approach. The key resistance level to watch in the short term is 4110-4150, and the key support level is 4030-4000. Please follow the trading rhythm closely.
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My analysis strategies for gold and Bitcoin were accurate on the first trading day of the week!This is likely to be a busy week, so I may not publish many articles, but I will still provide you with correct and meaningful analysis strategies and trading concepts!
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.