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Fundamentals

During Thursday's (November 2nd) Asian session, spot gold oscillated narrowly, and it is now trading at 1985. The major news yesterday was the Fed stopping interest rate hikes (as expected). Then, the ADP Nonfarm Payrolls were also worse than expected, and Powell repeated the same topic during the speech, that the interest rate hike decision is determined by future economic data, giving suppression on the dollars shortly. After reaching the bottom, gold rebounded in the hourly chart during the Asian session, and as the dollars weakened in the European and the U.S. sessions, gold once reached 1993.8. However, we mentioned yesterday, that the retracement had not ended. It would not be smooth as rebounds appeared in the middle. Thus, investors should not chase the ups and downs. As a result, gold showed a corresponding height. We also suggested that investors should go short at 1993, and a profit of 21 dollars was achieved at 1972, extending a profit for 1 week. Moreover, those who followed our instructions this week should have earned a price difference of 100 dollars! Nevertheless, any plans will be useless without implementation. Therefore, we should make simple plans that are easy to implement and give certain target levels to follow. If it is not the right trading time, we should just enjoy our lives without paying too much attention to the trade.  

Data: U.S. October ISM Manufacturing PMI fell to 46.7, the largest single-month decline in more than a year, a three-month low. It is expected to be flat in the expected 49. Among them, the new orders hit a new low since May. The Markit U.S. Manufacturing PMI was finalized at 50 in October, while the expected figure was 50, the initial figure was 50, and the final figure for September was 49.8. Besides, the ADP Nonfarm Payrolls increased by only 113,000, and payrolls grew at the lowest rate in two years. September JOLTS was reported at 9.55 million, which exceeded market expectations.

News: The Fed decided to slow down the pace of interest rate hikes in November, and the target range for the federal funds rate will be maintained between 5.25% and 5.50%. Powell said he "currently does not have the confidence" to assess whether the Fed's interest rate policy has been sufficient to reduce inflation, and the Fed will pay attention to more economic data to measure the sustainability of the recent declining inflation. If the economic data supports interest rate hikes, the Fed will consider raising interest rates. However, interest rate cuts are not currently on the agenda.

Geopolitical News: According to Israeli media (citing the Israeli Ministry of Health), the Israeli side has more than 1,400 people died during this round of conflict. The death toll on both the Palestinian and Israeli sides of the current round of conflict has exceeded 10,035. Meanwhile, the Bolivian government announced its decision to sever diplomatic relations with Israel. Today's focus: The U.S. Initial Jobless Claims, the Monthly Orders in September, and the Nonfarm Payrolls data to be announced tomorrow.  

Technical Analysis

Yesterday, gold rebounded under a retracing dollar. It once reached 1993.8, followed by a quick plunge to its lowest level at 1969.8, and a profit of 21 dollars was achieved. Regarding the pattern yesterday, gold closed with a doji star that with a long-upper-lower shadow, indicating a complex oscillating pattern. Based on the trend, it will normally test the direction at the beginning. With small rebounds and huge depreciation, gold has depreciated for 3 days this week, which may imply the start of a retracement. Then, we should not expect too much for the rest two days, just keep waiting for opportunities. Trading is simple but investors have complicated expectations. Now, the oscillation center of gold decreases, and the MACD movement tends to be flat at highs, forming a death cross. Therefore, we maintain a bearish view on gold until the buyers are eased and the retracement is sufficient. Today, the oscillating range will be from 1965 to 1993, and aggressive investors could trade shortly and sell at highs in this range.  

Trading Recommendations: Sell at highs. If gold ascends to 1993, investors could go short with small positions, and set the stop-loss at 1998. To take profits, the first target will be at 1980, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1965. Meanwhile, if gold appreciates to 2008, investors could go short with small positions, and set the stop-loss between 2010 and 2012. The target to take profits will be the same as the first time.  

Trading Recommendations

Trading direction: Short

Entry price: 1993

Target price: 1965

Stop loss: 1998

Support: 1970.000/1953.000

Resistance: 1983.000/1997.000