Gold Weekly ReviewGold Weekly Review: Gold Fluctuates at High Levels, with 3700-3615 Becoming a Key Demarcation Line
Gold continued its upward trend on Friday, closing higher for the fifth consecutive week. Spot gold closed at $3684.93 per ounce, up 1.12% on the day and 1.15% for the week. December COMEX gold futures rose 0.7% to $3707.35, briefly hitting a record high.
Analysis of Core Drivers:
The Federal Reserve announced a 25 basis point interest rate cut on Wednesday, its first easing measure of the year. However, it also emphasized that inflation risks remain, signaling caution about the future policy path. Gold prices fluctuated sharply following the interest rate decision, reflecting market disagreement on the pace of subsequent rate cuts. Market expectations currently remain above a 90% probability of another Fed rate cut in October.
Institutional Views and Expectations:
Many institutions remain optimistic about gold's structural upward trend. Citigroup raised its gold price forecast for the next three months to $3,800 per ounce, citing cyclical support from a weak US job market, uncertainty about tariff policies, and concerns about fiscal sustainability. The bank believes that if stagflation or a hard landing occurs, gold prices could reach $4,000; if trade tensions rapidly de-escalate or the economy remains resilient, they could fall back to $3,400.
Analysts generally believe that although the Federal Reserve has not been as dovish as some investors had hoped, the start of a rate-cutting cycle and the continued accumulation of gold holdings by many central banks remain key support in the medium and long term. Meanwhile, physical gold demand in India has risen to a ten-month high, reflecting market expectations for continued gold price increases.
Risks and Uncertainties:
In the short term, gold prices face pressure from a rebounding US dollar and rising US Treasury yields. Positive signals have emerged in the US-China trade talks, and a US government budget impasse leading to a shutdown could also disrupt market risk sentiment. Overall, gold is expected to remain volatile and positive, driven by the combined influence of monetary policy expectations, geopolitical risks, and physical demand.
Technical Analysis and Strategy:
Gold has recently been oscillating at a high level. The daily chart closed higher on Friday after a series of pullbacks, indicating valid support below. Currently, the bull-bear watersheds focus on the 3700 level above and the 3615 support level below. Trading within this wide range is challenging, so we recommend maintaining patience and waiting for entry opportunities near key levels.
From a technical perspective, the 4-hour chart has broken through the short-term descending trendline. The previous resistance level of 3660 has become a significant support level, indicating a strong short-term trend. Consider entering long positions after a pullback to the 3660-3650 support area, maintaining strict risk management.
In the medium to long term, while the weekly chart shows some deviations that require time to consolidate, the fundamental support remains clear. The Federal Reserve has begun its interest rate cut cycle, and market expectations for further rate cuts in October and December remain high, which will provide continued upward momentum for gold prices. Overall, gold remains in a volatile upward trend, with the center of gravity of support shifting upward, limiting the potential for a significant correction.
