On Monday (October 30th), spot gold opened at $2004.19 per ounce, reaching a high of $2006.69 per ounce and a low of $1991 per ounce. As of press release, the gold price was at $1997 per ounce, a decrease of 0.43%. The US dollar index also saw a significant correction in the short term, hitting 106.08 at one point. This week, the Federal Reserve, the Bank of England, and the Bank of Japan will announce interest rate decisions, with the Federal Reserve's decision being the most closely watched by the market. The results will be announced at 2am Beijing time on Thursday, and Federal Reserve Chairman Powell will hold a press conference in half an hour. From some international news over the weekend, industry agencies generally predict that the Federal Reserve will remain calm, but we retail investors still need to be vigilant about market risks caused by "hawkish" expectations. On October 31st, the Bank of Japan announced its interest rate resolution. On November 2nd, the Bank of England decided on interest rates. Since the last interest rate meeting, the US economy has maintained strong growth, slowing inflation is facing resistance, US bond yields have significantly increased, and financial conditions have significantly tightened. Overall, the need for further tightening by the Federal Reserve has decreased, but it will remain vigilant against inflation risks.
Since the Hamas attack on Israel on October 7th, precious metals have been one of the biggest winners, with prices rising by over 9% as demand for safe haven assets increases. If tensions escalate and investors bet that their spillover effects will spread to a wider region crucial to global energy supply, then the region may continue to benefit. This conflict has made the trend of US interest rates and treasury bond bond yields the main price drivers of gold bars. Nevertheless, this week we will continue to closely monitor the impact of interest rate decisions by major central banks, including the Federal Reserve, on borrowing costs. The market is also paying attention to the Treasury's new lending plan, which will be announced a few hours before the Federal Reserve's interest rate decision on Wednesday. The announcement will reveal to what extent the Ministry of Finance will increase the sale of long-term bonds to fund the widening budget deficit, and the sell-off so far has led to yields soaring to their highest levels since before the global financial crisis. A higher yield is usually unfavorable for interest free gold bars.
【 Market News Analysis 】 Gold prices fell slightly on Monday, but gold futures prices are still above the key level of $2000 per ounce, as the uncertainty of the Israeli-Palestinian conflict and this week's Federal Reserve meeting have boosted safe haven demand for gold. Gold hit a high last week as the ongoing uncertainty of the Middle East conflict has led investors to lean towards traditional safe haven assets, and the market is watching to see if any other countries join the conflict. On Monday, the US dollar index fell. The market is now focused on the end of Wednesday's two-day Federal Reserve meeting, and people generally expect the Federal Reserve to keep interest rates unchanged. But traders expect the Federal Reserve to reiterate its stance on long-term interest rate hikes, especially in recent times when Federal Reserve officials have still opened the door to at least one more rate hike this year. The expected release of non farm employment data on Friday will affect this outlook. The strong US economy also provides the Federal Reserve with greater space to maintain higher interest rates.
Higher interest rates do not bode well for gold as they increase the opportunity cost of investing in gold. With global interest rates rising, this view has hit gold prices hard in the past year. It is shown that inflation has rebounded again while economic growth remains resilient.
Richard Snow, a strategist at DailyFX, said that the bullish market for gold has cooled down, but the potential for strong upward momentum still exists. He said, "Gold is highly sensitive to political conflicts, so it is not surprising that this safe haven metal has risen exponentially in recent weeks, with a low point increase of nearly 10%." However, Snow also stated that as traders evaluate the overbought situation of the commodity and "closely monitor the latest negotiations around a possible ceasefire and the release of civilian hostages," this momentum seems to have been suspended this week. He pointed out that gold prices fell at the beginning of this week, but rebounded as the week progressed. The US yield is still at a high level, indicating that the main driving force of gold is concentrated in its hedging appeal
Gold is still the preferred market, bonds provide little protection, and stocks continue to sell, "Ole Hansen, head of commodity strategy, said in a comment on Kitco News. "In the past few days, we have seen some profit taking, because we believe that the attack on US $2000 will require additional consolidation. But this is clearly not the case. The closing price is higher than the top, which may extend to 2050." Analysts said: "The recent gold price and 10-year inflation protected treasury bond bonds (TIPS) The deviation between returns indicates that political risk and economic uncertainty have exceeded the impact of high interest rates on the cost of holding gold
If the Federal Reserve confirms that there is no need for further tightening this year, the dollar may face bearish pressure again, and the yield of US treasury bond bonds may fall. In this situation, gold may gather to see the uptrend. On the other hand, the Federal Reserve may use economic strength as an excuse to open the door for another rate hike in December and force gold prices to decline.
On Friday, the US Bureau of Labor Statistics will release its October employment report. If the Federal Reserve adopts a neutral tone and points out that it will evaluate the data before deciding whether the policy is sufficiently restrictive in its current state, then the employment data may have a stronger reaction than usual. Another impressive non farm employment data (NFP) reaching or exceeding 250000 points may prompt investors to reassess interest rate prospects and attract hawkish Federal Reserve bets, triggering a new round of US dollar rebound. A disappointing number below 150000 may highlight the relaxed state of the labor market and help gold hold its ground.
Technical analysis of gold: Since the opening of the market today, it has fluctuated and adjusted, falling back to below 2000, with the lowest level reaching the first line of 1990. Although the adjustment was relatively large, it mainly digested the fundamental impact during the weekend. Technically, there has not yet been a significant suppression of the upward trend, and the escalation and deterioration of the situation between Palestine and Israel is a high probability event. The market also has strong expectations for the Federal Reserve to end its interest rate hike cycle, This is all beneficial for bullish gold, so even if there is an adjustment in gold at present, it cannot be seen as a reversal. Its main trend is still bullish.
In the evening, the focus on the competition for the first line in 1990 remains relatively crucial, as it directly reflects the market's attitude towards the situation between Palestine and Israel. Technically, there has been a piercing action in 2000, so in the later stage, under the effect of hedging buying, there may be further gains. Therefore, the current correction also provides opportunities for bulls to enter again. As long as gold stays above the 5-day line of 1987 in the short term, there is great hope for further gains.
Focus on the top line resistance from 2005 to 2003,
Follow the frontline support from 1983 to 1980 below,
Analysis of crude oil news: On Monday (October 30th) in the US market, crude oil prices were trading around 82.60 US dollars per barrel. As the geopolitical premium was gradually squeezed out, the oil price had dropped from a high level in the past week, and then emerged from the seesaw market with support from the high range. Under multiple factors of continuous adjustment and chaos, the trend of oil prices was quite struggling. Last Friday night, with news from the market that Israeli ground forces were expanding their operations in Gaza, Oil prices have rebounded significantly from intraday lows by more than 3%, and in the context of the constantly changing conflict between Palestine and Israel, oil prices have emerged from the fluctuating market for four consecutive trading days, causing many investors to lose their direction in the fluctuating oil prices. As geopolitical premiums are gradually squeezed out, oil prices have fallen from high levels in the past week, and then emerged from the seesaw market with support from the high range. Amidst multiple factors that are constantly cutting and confusing, the trend of oil prices has struggled, fluctuating back and forth within the range of around $3 for several consecutive days. On the one hand, the Palestinian-Israeli conflict is developing towards a controllable trend, while there are still recurring risks in the conflict, which has cooled down the geopolitical risks in the oil market. At the same time, investors remain cautious about potential risks, and it is difficult for investors to make a final decision on the future operation of oil prices. This has led to alternating fluctuations in oil prices in the recent period. From the progress of the Palestinian-Israeli conflict, Israel has increased its offensive against Gaza over the weekend, Iranian President Leahy said Israel's actions may force all countries to take action. The disturbance of geopolitical factors on oil prices will continue. Prior to this, oil prices have accumulated momentum in range fluctuations until the situation becomes clear, and investors will refocus their attention on the supply and demand aspects of crude oil before making direction choices.
Technical analysis of crude oil: Last week, crude oil closed on the small negative line, followed by a rebound in the high and a decrease in the low, but ultimately closed above the medium track. During the weekly competition for the medium track, yin and yang exchanged and fluctuated. The K-line structure of the daily line is also in competition, with a fluctuating trend of one yin and one yang, and there is currently no indication of the strength of the breakthrough. We will continue to focus on last week's range, mainly focusing on the defense with double lows supporting 81.50-82.0. Above, it is necessary to focus on the 95.0. breaking range to get out of the way. The 4-hour chart repeatedly dips and rebounds, but has not yet missed 81.50. This position remains unchanged. In the short term, it is not advisable to be overly bearish, at least it is still a seesaw oscillation. Is it a rebound in the upper end of the market or a potential break? It remains to be observed that this week we will still focus on breaking through the range. Currently, we are supporting the lower track range and have not broken through in the short term. We can first look for a rebound above the low point and adjust our thinking after breaking through.
The upper short-term focus is on the first line of resistance from 83.7 to 83.5,
Below, short-term focus on 80.8-81.0 frontline support.
