On September 28, last Friday we noted that a series of hawkish remarks from Federal Reserve officials had strengthened market expectations for further rate hikes this year, supporting both the dollar and Treasury yields and directly weighing on gold prices. In terms of trading, we suggested watching upside resistance at $4,300, followed by $4,330 and $4,360, and downside support at $4,244, followed by $4,200.
Looking at the subsequent price action, after the Asian session opened last Friday, gold rebounded to $4,295 where it met resistance and then fell back to stabilize at $4,256. After the European session opened, gold launched another rebound, briefly breaking above the $4,300 round number and refreshing its daily high to $4,315. After the US session opened, gold came under pressure and declined, falling to $4,254 where it stabilized, then rebounding to $4,300 where it encountered resistance again.
Overall, last Friday gold recorded a doji candlestick on the daily chart, with the price rebound capped and the metal consolidating near a one-month low. A star-rated analyst at Wolfinance believes that gold came under broad pressure last week, giving back all of the gains recorded after the Fed's rate hike, with the core reason being rising market expectations for further Fed tightening. Specifically, after the Fed announced a 25 basis point rate hike in September, multiple Fed officials delivered hawkish remarks, and the dot plot suggested one more hike this year. September PMI data significantly beat expectations, further reinforcing the case for hiking, with the probability of a Fed hike in October rising above 70% and the probability of a December hike reaching as high as 95%. This supported both the dollar and Treasury yields, with the dollar hitting a two-month high last week and the 10-year Treasury yield reaching its highest since 2007, raising the holding cost of gold and directly pressuring prices.
On the daily chart, gold's rebound met resistance and the metal came under pressure again, currently maintaining a weak consolidation. For upside resistance, attention can be paid to the $4,300 round number, where gold rebounded and met resistance after stabilizing last Friday and which is also near the 10-day moving average on the daily chart, followed by the daily Bollinger Band middle rail at $4,342, which is also the upper rail of the 4-hour Bollinger Band. For downside support, attention can be paid to $4,254, where gold stabilized twice under pressure last Friday, followed by the one-month-plus low of $4,235 and the $4,200 round number. The 5-day moving average has formed a death cross, the MACD indicator is crossing downward, and the KDJ and RSI indicators are also crossing lower, with the short-term technical picture suggesting gold faces continued downside risk.
Intraday reference for gold: After the Fed's September rate hike, Fed officials have continuously released hawkish signals, raising market expectations for further tightening this year and directly pressuring gold prices. In terms of trading, a range-bound approach is recommended, with upside resistance to watch at $4,300 and $4,342, and downside support to watch at $4,254, followed by $4,235 and $4,200.
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