Interest Rate Decision Imminent!Key Events:
Federal Reserve Meeting: The Fed will announce its interest rate decision, with the market widely expecting a 25 basis point cut. A dovish signal from the Fed (such as hinting at further rate cuts) could boost gold prices; a cautious stance could put downward pressure on prices.
US-China Trade Situation: High-level officials from both countries have reached an agreement on a framework for a trade deal, and Trump will meet with Chinese officials today. Easing trade tensions have reduced safe-haven demand for gold, leading to a recent decline in prices.
Market Sentiment Shift: Risk appetite has increased, with major global stock indices (such as the S&P 500 and Nasdaq) hitting record highs, causing funds to flow from safe-haven assets like gold to risk assets.
Economic Data and Background:
US Economic Indicators: ADP weekly employment data showed modest growth in private sector employment (14,000 new jobs per week), but the consumer confidence index (94.6) slightly exceeded expectations. These data eased concerns about a recession, further suppressing gold prices.
Fund Flows: Gold ETF holdings decreased (e.g., SPDR holdings remained flat, iShares silver holdings declined significantly), indicating that speculative funds continued to reduce their long positions in gold, suggesting strong short-term bearish sentiment.
Long-Term Supporting Factors: Global central bank gold purchasing trends, geopolitical risks, and the Fed's interest rate cut cycle continue to support gold in the medium to long term. The London Bullion Market Association (LBMA) predicts that gold prices may rise to $4,980 in the next 12 months.
I. Price Movement Review:
Gold prices fell for three consecutive days, reaching a low of $3,886.51 on October 28, breaking below the key psychological level of $4,000, with a cumulative drop of over 10%. Technical selling and long position liquidation were the main reasons.
II. Key Technical Levels:
Support Levels:
Short-term: 3920-3900 (tested in Asian trading).
Strong Support: 3885-3880 (yesterday's low coincides with the 60-day moving average; a break below this level could lead to a test of $3,819). Resistance Levels:
Short-term: 3970-4000 (a break above could lead to 4030 USD).
Strong Resistance: 4086 (Second resistance level on the 4-hour chart).
III. Optimal Trading Strategy
Trend Judgment:
Short-term: Gold prices are suppressed by fundamentals (trade optimism + risk appetite), but the Fed decision may trigger a rebound. If gold prices stabilize above 4000, the trend will turn bullish; if they remain below 4000, a short-term top will form.
Medium-to-Long-Term: Pullbacks are considered healthy technical corrections, and central bank gold purchases and interest rate cuts support the long-term bullish logic.
Specific Trading Recommendations:
Long Strategy:
Entry Point: Light long position at 3950-3957 USD, or add to the position on dips at 3920-3900 USD.
Stop Loss: 3945 USD (if broken) or 3880 USD (below key support).
Target: 4000 USD (hold until 4030 USD if it breaks through).
Short Selling Strategy:
Entry Point: Sell short on a rebound to the $3970-$4000 range.
Stop Loss: Above $4005.
Target: $3920-$3900.
If the Fed is more dovish than expected, consider going long with a target of $4030; if hawkish, target $3880.
Risk Warning: Fed Chair Powell's speech and the outcome of the US-China meeting may trigger significant volatility. Avoid being heavily invested and affected by the volatility!
