On Tuesday (October 9th), gold prices fluctuated in the US market, as safe haven buying increased due to the ongoing war between Israel and Hamas and the highly uncertain consequences. As of press release, spot gold is currently trading at $1854.54 per ounce, a decrease of 0.35% during the day. Market risk sentiment is positive, with gold consolidating at high levels after yesterday's surge. The price of gold briefly climbed to $1865 per ounce, the highest since September 29th. Gold prices rose by about 1.6% on Monday, the largest daily increase in five months. Gold prices have also benefited from a shift in interest rate outlook mentality. US policymakers unanimously believe that the recent surge in US treasury bond bond yields (which reversed on Tuesday) may replace the further increase in benchmark interest rates. Higher interest rates are usually detrimental to interest free gold.
As the Israeli-Palestinian conflict escalates, Israel has launched a deadly strike on the Gaza Strip in retaliation for Hamas's devastating attacks. The Federal Reserve's Vice Chairman responsible for regulating financial affairs, Barr, mentioned in another event the September non farm report that unexpectedly "exploded" last Friday. He believes that some important factors indicate that the supply and demand of the US labor market are tending towards a better balance. In view of the recent surge in the yield of long-term US treasury bond bonds, the need for the Federal Reserve to further raise the benchmark interest rate may be reduced. Analysts said on Monday that two Federal Reserve officials stated that the rise in long-term bond yields may offset the need for further rate hikes, as well as traders seeking safe haven assets after the Palestinian militant group Hamas attacked Israel, driving down bond yields. The implied pricing of futures with the possibility of the Federal Reserve raising interest rates again this year has dropped from over 40% last week to around 30% on Tuesday. The yield on the 10-year US treasury bond bond (contrary to the price trend) fell 11 basis points to 4.674%. Last week, it reached its highest level since 2007, at 4.887%. Traders are waiting for more Fed officials to speak later today, as well as the minutes of the last Fed meeting released on Wednesday and the US inflation data released on Thursday.
At the close of the Asian market on Tuesday (October 10th), spot gold prices once again showed a short-term rapid downward trend, with gold prices approaching $1855 per ounce. In the Asian market, gold prices once exceeded $1865 per ounce. This article will analyze the technological prospects of the domestic gold market.
The US dollar index has recently rebounded above 106.20, which has put pressure on gold prices.
If the gold price can remain above $1847.50 per ounce, then the overall market trend remains bullish.
The gold price has approached our expected target price of $1873.50 per ounce in the previous period. From the 4-hour chart, the 50 cycle index moving average (EMA) provides support for gold prices, which helps drive gold prices further up and above the above levels. If the gold price can continue to rise, its target will be $1913.15 per ounce.
Technical analysis of gold: Yesterday, gold opened high and closed high, with the daily line closing at the physical bullish line. The K-line stabilized and the 10-year moving average rose, while the 5-day moving average turned upward. In the short term, gold has strong upward momentum, and is expected to further rise today. The upper focus is on the resistance level of the 1873 line. Overall, the current rebound in the daily level is a correction of the previous downward trend. This time, gold stopped falling and rebounded in 1810, in conjunction with the upward trend of the news surface, sustainability is a problem, Technically, there has been no trend shift. From the wave structure perspective, it is still in the upward movement of 1810 with a rebound trend of C wave 4, and there is still a downward wave of 5 waves. Yesterday morning, the high opening left a gap that has not been filled yet. Generally speaking, the gap in gold will be covered on the same day, with no more than three trading days at the latest, and there are very few cases where it is not covered.
The 4-hour level gold opened high in the short range yesterday, while the white market maintained a star K consolidation. It continued to rebound in the evening, with a strong upward trend. The rebound is only a correction to the previous decline, leaving a gap in the lower short range, and the possibility of a big rise is not high. Today, we will continue to pay attention to the pressure drop after the rebound to fill the gap. In addition, even if the current trend of gold undergoes a reversal, there will be a second bottoming action. From the 1-hour chart, it can be seen that gold rebounded after hitting 1844 after opening high yesterday. This level has become the watershed for today's bulls. With the continuous fermentation of bulls, the resistance above today will increase slightly, and the price is currently reaching the daily resistance level. This is also the first time that the price has corrected to daily resistance. We need to pay attention to the market's further pressure and decline. In addition, the gap in the following week has not been filled yet, and the price has shown a deviation phenomenon in the past hour, So currently, we are directly empty on the first line of 1865, while we will focus on the 1845-1835 area below. After the price fully fills the gap, we will conduct a specific analysis again to see if it will continue to be under pressure or be revised again.
The upper short-term focus is on the resistance on the 1870-1873 front line, while the lower short-term focus is on the support on the 1840-1843 front line.
On Tuesday (October 10th), the upward trend of US crude oil was hindered, and strategists warned that the brutal conflict between Israel and Hamas could exacerbate inflation, suppress economic growth, and lower the stock market. They said that this conflict may put the Federal Reserve in a dilemma of whether to continue raising interest rates to curb price increases or reverse the course to reduce the risk of economic recession. In an interview with Bloomberg, analysts said: "Geopolitical crises in the Middle East usually lead to an increase in oil prices and a decrease in stock prices. This largely depends on whether this crisis is another short-term outbreak or a larger event like the war between Israel and Iran It is clear that any oil producing country, led by Saudi Arabia, may make crude oil prices more expensive and have a negative inflationary impact on Western countries. If these reasons lead to an economic recession, this will mean longer periods of high interest rates and stock market declines. Senior analysts predict that as 40% of global oil exports pass through the Strait of Hormuz, The conflict between Israel and Iran can easily lead to a $5-10 increase in oil prices.
As the focus shifts to the Middle East, political tensions have disrupted global financial markets. Oil prices have fluctuated significantly in the midst of escalating risks, rising sharply on Monday and then falling on Tuesday. Concerns about supply disruptions caused by the war between Israel and the Palestinian Islamic organization Hamas have eased, but market sentiment is relatively cautious, and investors have still not engaged in intense selling as they are concerned about further developments in the future.
This week, global markets began to experience increased volatility, and tensions between Palestine and Israel escalated. These political factors have added to the already tumultuous week in the global market. It is worth noting that after last week's surprising employment data, the release of US CPI data has become even more important. However, if tensions in the Middle East continue to escalate, the market is likely to consider political risks this week. This may temporarily overshadow major economic developments this week. In addition, the latest FOMC meeting minutes will be released this week. However, if they do not contain any new information beyond the previously stated statements, their impact may be limited. In contrast, the interaction between inflation data and political tensions is expected to have a significant impact on the upcoming interest rate decision by the Federal Reserve. Although Israel and Hamas are not the main players in the oil industry, investors are concerned that political factors will spread to neighboring Iran and Saudi Arabia, and the ongoing conflict in the region may also threaten the stability of the important oil supply region, the Strait of Hormuz. This route accounts for nearly one-fifth of the global oil distribution. Hamas' public supporter Iran has so far denied any connection or involvement in the escalation of the Gaza conflict, but the market remains highly concerned about the possibility of further sanctions against Iran by Israeli supporters such as the United States. At present, American politicians have not taken any measures to alleviate the concerns of energy investors. US Senator Lindsay Graham pointed out on Monday that the United States should threaten Iran's oil infrastructure, And he said, "If this conflict escalates and if Israel is attacked with strength in the north, we should tell Ayatollah that we will destroy your refineries and oil infrastructure." Oil traders will closely monitor any escalation of US rhetoric. US Secretary of State Antony Blinken is expected to arrive in Israel on Thursday for talks with local leaders. Analysts led by Vikas Dwivedi from Macquarie Group stated that the armed conflict between Israel and Hamas is unlikely to disrupt the flow of physical crude oil, as the US government has been implementing policies to limit supply disruptions. Macquarie pointed out that there are some upward risks associated with the Middle East conflict in oil prices, but overall they remain bearish due to the weakened OPEC+compliance capacity and the increase in low sulfur crude oil production in the United States, North Sea, and Brazil. It is also reported that Indonesia's state-owned flagship airline, Indonesian Eagle Airlines, has completed flight tests using palm oil blended jet fuel on a Boeing 737-800NG aircraft. According to the Singapore Business Times, the aircraft flew over 130 kilometers from the capital Jakarta last week using jet fuel containing 2.4% palm oil, heading to Pelabuhan Ratu in southern Java. Ilfan Setiaputra, CEO of Indonesia Eagle Airlines, said: With these results in mind, Indonesian Eagle Airlines is preparing to explore the use of clean aviation fuel on commercial flights. He added that the wider use of this fuel will be based on a comprehensive study. Despite steady growth in oil demand, weakened supply, and low global inventory, the US government has already consumed it to 1985 levels and refused to replenish its strategic oil reserves. US shale oil producers are focused on dividends, repurchases, and debt reduction Instead of increasing production due to price fluctuations and lack of capital. Global producers such as the Organization of Petroleum Exporting Countries (OPEC) also have almost no idle production capacity after meeting the surge in demand in economies that have been closed and reopened due to the pandemic. At the same time, Goldman Sachs predicts that the rapid growth of oil demand in non OECD member countries will greatly exceed the mild decline in oil demand of the OECD this year. In addition, according to research by Royal Bank of Canada, global new refining capacity will reach 4 million barrels per day from 2023 to 2024, the largest two-year increase in capacity in 45 years. The escalation of tensions in the Middle East is expected to keep oil prices optimistic. The Chief Economist of the International Monetary Fund, Pierre Gulindchas, stated on Tuesday that "IMF research shows that a 10% increase in oil prices will lead to a decrease in global output of about 0.2% the following year, pushing up global inflation by about 0.4%." However, many analysts still hold a bullish attitude towards oil prices. CBA energy analyst Vivek Dhar stated that the disclosure of evidence of Iran's involvement in this matter will drive up oil prices. Dahl said, "We still believe that Brent crude oil will eventually stabilize at $90 to $100 per barrel in the fourth quarter of 2023." He added that the conflict between Palestine and Israel has increased the risk of Brent crude oil futures prices rising to $100 per barrel or above.
Crude oil opened high yesterday with a small positive line for consolidation and correction. The daily gap has not been filled, but the sustained momentum of bulls is also insufficient. After a longer period of consolidation and correction, the short-term and weekly charts began to differentiate. The weekly chart is still confirming its form, with a slight rebound in the short term. It remains to be seen whether this is a rebound correction or a reverse recovery. The 4-hour chart uses a 95.10 high point as the downward wave shape, and is currently undergoing a rebound correction in the short-term downward wave shape. Coincidentally, yesterday's rebound from the golden point of 0.382 entered a pause in consolidation at the resistance point. Waiting for a new direction. Switch back and forth between short and empty lines. More testing the grasp of entry points.
The upper short-term focus is on the 87-87.5 line of resistance,
Below, short-term focus on 85.3-85.0 frontline support.
