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Fundamentals

In Wednesday's (November 8th) Asian session, spot gold oscillated narrowly, and it is now trading at 1968. Several senior Fed officials delivered hawkish remarks yesterday. They said inflation is still too high at present. The market then bet on a possible December rate hike, which weighed on the gold price. The XAUUSD pair fell by more than $20 to as low as $1956.5 during the session. It's worth noting that the U.S. bond index closed sharply lower though the dollar rose on the Fed officials' hawkish remarks. Three major U.S. stock indexes continued to rise across the board. The risk appetite has been improving, which is a great factor for this round of gold price movements. Perhaps only when the U.S. stock indexes stop rising will the gold price stop declining. After yesterday's fall, the pair has basically fallen back to our expected 1953 level. It's unlikely to continue to fall sharply as the support at $1950 is strong. Currently, technical indicator conditions have eased. The market is expected to be volatile in the near term. After it is stable, it will either go up or move down. At present, the wars continue, and the external conditions are complex. However, oil prices reflect that the conflict will not expand, as was mentioned previously, major institutions prefer aggressive trading, which is also wash trading. Therefore, the best opportunity lies in the expected ups and downs. It doesn't mean chasing the trend arbitrarily but try with small stop loss by considering many other factors, such as reversals, breakthroughs, doji stars, spinning top candlesticks, and MACD indicators. Then, investors can win a better profit/loss ratio, and the overbought at highs suggests a profitable space to go short.    

Data: the U.S. trade deficit in September expanded 4.9% MoM to $61.5 billion, higher than the expected deficit of $59.9 billion. Exports rose to a more than one-year high at $261.11 billion, while imports ascended to the highest since February at $322.66 billion. Eurozone PPI fell 12.4% in September YoY, the biggest drop on record and the fifth consecutive monthly decline, compared with expectations for a 13% decline and an 11.5% drop in the previous reading. PPI grew 0.5% in September MoM, beating expectations for a 0.3% increase.

Today's focus: Fed Chairman Powell will deliver a speech, and the U.S. Wholesales Monthly rate for September will be announced at 23:00.

Technical Analysis

Yesterday, gold prices continued to fall unilaterally. After opening at highs, gold depreciated from 1979 with oscillations once to 1956.5 because of the rebounding USD in the U.S. session. This level forms a phase double bottom pattern with the previous low and finally closed lower with a long-lower-shadow. Certainly, this bearish candle reflects strong support below, and MACD indicators expanded after a death cross appeared. With a horizontal movement, the overbought phenomenon will be improved, and the horizontal movement will continue at present. After the retracement, the space below is compressed, and aggressive investors should buy low and sell high (the main logic will be selling at highs).

Trading Recommendations: Buy low and sell high. If gold ascends to the range between 1978 and 1980, investors could go short with small positions, and set the stop-loss at 1984. To take profits, the first target will be at 1965, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1953. Meanwhile, if gold plunges to the range between 1950 and 1953, investors could go long with small positions, and fix the stop-loss at 1948. The first target price to take profits will be 1965, where investors can reduce the position size and move the stop-loss to breakeven, and the second target price is 1978.  

Trading Recommendations

Trading direction: Short

Entry price: 1982

Stop loss: 1962

Stop loss: 1986

Support: 1962.000/1953.000

Resistance: 1986.000/1997.000