Where Will Gold Go Next Week? Weekly Price Review
On Friday (October 31), international gold prices fell due to a stronger dollar and increased market uncertainty regarding whether the Federal Reserve would further cut interest rates. However, gold is still on track for its third consecutive monthly gain. As of this writing, spot gold was down 0.53% to $4,003.60, up about 4% for the month. The dollar index hovered near a three-month high, making gold more expensive for holders of other currencies. Global gold demand hit a record high in the third quarter due to the Fed's rate cuts, the US government shutdown, and geopolitical tensions; yesterday, US President Trump announced that he would conduct a nuclear test, the first such test in 30 years since it was suspended in 1992, providing strong support for gold. Easing US-China trade tensions and Fed Chairman Powell's hawkish remarks were bearish for gold.
After the previous gains, gold prices underwent a slight correction as investors began taking profits ahead of the weekend and the end of the month, leading to a more cautious market sentiment. The recent sharp pullback in gold prices is primarily driven by market optimism regarding a potential trade agreement between the US and China, as well as the increasingly hawkish stance of the Federal Reserve. The Fed announced its second rate cut this year on Wednesday, lowering it by 25 basis points to reduce the target range for the federal funds rate to 3.75%–4.00%. However, following Powell's speech, traders lowered their expectations for another rate cut in December. According to the CME FedWatch tool, the market currently sees a 74.8% probability of a 25 basis point rate cut in December, down from 91.1% a week ago. On the other hand, gold prices were partly supported by the latest report from the World Gold Council (WGC). The report showed that global gold demand increased by 3% year-on-year to 1,313 tons, a record high for a single quarter, with a surge in investment demand being the main driver. Furthermore, the continued contraction in China's manufacturing sector is also unfavorable for gold. Looking ahead to next week, the gold market will still face many uncertainties, and the battle between bulls and bears is expected to continue. From a news perspective, a series of important economic data will be released next week, such as the US non-farm payrolls and PMI data. The performance of these data will directly affect market expectations for the US economic outlook, and thus influence gold price movements. In addition, speeches by Federal Reserve officials and developments in the geopolitical situation also require close attention.
Gold Price Trend Analysis for Next Monday:
Gold Technical Analysis: Gold is currently continuing its consolidation. Can the bulls rise? Next week will be crucial. If gold continues its strength on Monday, it is highly likely that the rebound will continue. Remember, it's just a rebound; the daily chart for gold will then enter a long period of adjustment, with significant ups and downs. So, where will gold go next week?
From a weekly chart perspective, gold prices have closed lower for several consecutive weeks, currently below the 5-week moving average, which shows signs of turning downwards, indicating that short-term bearish forces are in control. Regarding the MACD indicator, the green bars are continuously shortening, and the fast and slow lines have crossed at a high level and the gap is gradually widening, further confirming the bearish dominance. However, from a longer-term uptrend perspective, gold is currently still within an upward channel, with key support around $3900. As long as this level is not decisively broken, the long-term uptrend for gold is likely to continue.
On the daily chart, gold prices are below multiple moving averages, with the moving average system showing a bearish alignment. The short-term 5-day and 10-day moving averages continue to exert downward pressure on gold prices. The Bollinger Bands are widening downwards, with the price trading between the middle and lower bands, and close to the lower band support, indicating a short-term weak market. Yesterday, the Asian session saw a high of 4046 followed by a pullback, and the US session saw a break below the intraday low to 3972, resulting in a long-shadowed bearish candlestick. Looking at the daily chart alone, barring any news events, Monday's strategy is to sell on rallies. Daily resistance is around 4023; consider shorting at this level. The US session high is around 4010, meaning the market is likely to weaken and trade below 4010. The initial target is around 3980, with a break below that level targeting yesterday's low of 3972. Before the 3972 level is broken, there is still a chance for a rebound, so a small stop-loss can be used to short. If it breaks through, continue shorting on the rebound. In summary, for short-term gold trading next Monday, the key resistance level to watch is 4010-4023, and the key support level is 3915-3885. Please follow the trend closely. Welcome to discuss.
Gold Trading Strategy Reference for Next Monday:
Selling Strategy: Sell gold in batches around 4010-4015 with 20% of your position, targeting 3980-3960, with a further target of 3950 if it breaks through.
Buying Strategy: Buy gold in batches around 3950-3955 with 20% of your position, targeting 3980-4000, with a further target of 4010 if it breaks through.
