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Fundamentals

During the Asian session on Wednesday (November 1), spot gold fluctuated upward and is currently trading around 1979. Gold prices retreated sharply after surging higher yesterday, with the top hitting 2007.8. In Europe and the American sessions, gold prices delined in one-way, with the lowest at 1978. Yesterday, gold prices failed to test the record high again, and finally closed a long bear candle. The main reason for the sharp decline is the fear of heights after the conflict has cooled down, and the decline in the yen which has boosted the strength of the dollar and has weighed on gold prices. The successive ramp-ups are more indicative signs of weakness in the market. Yesterday, we recommended to go short for the gold price at 2003, which also fully cashed out a very satisfactory profit of $23 around 1980. Opportunities come out patiently, not traded. The charm of the market lies in its unknown results, but each time there will be a different harvest. Take profit is material wealth, stop loss is spiritual wealth! I am keen on fishing, take fishing as an example, you never know what fish will be caught when the next rod is thrown, it may be hanging to the bottom, or it may be tangential, but what you have to do is to keep throwing the rod, wait patiently, look at the floating signal, lift the rod, and let the result go! Trading is the same, what you have to do is to trade according to your planned strategy, and you must accept the specific result no matter what it is, but the most time-consuming thing for you is to wait!  

Data: Eurozone GDP fell 0.1% QoQ in the third quarter, less than expected. Eurozone inflation continued to cool, with the preliminary harmonized CPI decelerating sharply to 2.9% YoY in October from 4.3% in September, which is lower than the expected 3.1%, with the lowest level in nearly two years. The core harmonized CPI fell to 4.2% YoY in October, the lowest in a year. The key US home price index hit a record high in August, rising for seven consecutive months, but high interest rates may dampen future gains. The Standard and Poor's Case Shiller index (S&P/CS) hit a record high in August after the seasonally adjusted, rising for the seventh consecutive month, and surged 0.9% MoM, and 2.57% YoY in August.  

News: Yesterday, the Bank of Japan announced for the first time in seven years that it would abandon the upper limit of maintaining hard yields, and the upper limit of long-term yields will be referenced at 1%, which means that Japanese bond yields will be allowed to break through 1%.  

Geographic: According to Israeli media, citing the Israeli Ministry of Health, more than 1,400 people have died on the Israeli side in this round of conflict. In this round of clashes, the death toll between Palestinians and Israelis has exceeded 10,035. The Government of Bolivia announced its decision to sever diplomatic relations with the State of Israel.  

Today, investors need to pay attention to the Fed's monetary policy decision in the early morning and Powell's post-meeting speech.  

Technical Analysis

Trading at the daily timeframe, gold prices weakened even more significantly yesterday, surging as high as 2007.5. On the third day, the gold price fell as low as 1978, and finally closed a full long bear candle with a long upper lead, achieving 2 consecutive bears. In the past few days, friends who have taken short positions at a high level may be able to reap a relatively good profit. At the moment, the MACD is also showing signs of forming a death cross in the overbought zone. According to the inertia of the market, the price may have to pull back as expected. The space below will depend on the second half of the week's data. If there is support from the non-farm payrolls and Fed decisions, 1950 may be seen below. However, the market will not be so smooth. We emphasized yesterday that the pullback in gold prices is the general direction, and there is no pullback to repair and smooth the moving average, the space for growth is extremely limited. Many people may wonder, now that the gold price has retraced by more than $20, is it enough? My answer is no! In trading, we may easily make a mistake, that is, focusing on the price but not the trend. However, if a trend is formed, it will not come to an end in a day or two. If the pullback trend is determined now, then the room below is still exist. The ability to hold positions should be exercised repeatedly from daily trading. Yesterday we also said that you have to learn to enjoy the big oscillations, the rougher the sea, the bigger the fish!

Traders can mainly go short at high during the day. If the price surges to around 1993, you can still go short with small positions in the short term. The stop loss is 1997. The first target to take profit is 1983, where you can reduce your positions and move the stop loss to break even, and the second target is 1972. If the price rises above 2000 again, which indicates that the market will have a short-term turn, investors should not chase short during the day, but should wait and see! Investors who really want to go short can put the position a little higher and try it in the range of 2010-2015.

Trading Recommendations

Trading Direction: Short

Entry Price: 1993

Target Price: 1972

Stop Loss: 1997

Support: 1972.000/1953.000

Resistance: 1983.000/1997.000