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Fundamentals

During the Asian session on Thursday (November 9), spot gold fluctuated in a narrow range and is currently trading around 1951. Yesterday, US wholesale data continued to improve, slightly boosting the dollar, but the market was mainly trying to digest yesterday's hawkish speeches from Fed officials. Gold prices were still under pressure, continuing the weakness of the day before yesterday, and the rebound was weak throughout the day. The highest point was around 1971, and the price once fell below the 1950 mark. Finally, after the price fell to around 1948 and gained a foothold, it barely closed above 1950. As risk aversion fades, perhaps gold prices will gradually return to fundamental trading, i.e. pegging directly to the US dollar. Yesterday, we saw that although the yield of US bonds has fallen sharply, in the face of the huge debt deficit that is growing year by year and the current background of high interest rates, the issuance of US bonds has been in a vicious circle of spontaneous acceleration, and oversupply is also an inevitable trend in the future. Reducing interest expenses while inflation is under control is an inevitable trend in the future. This seems to be an impossible paradox, perhaps the US really needs a major recession to achieve this goal. For gold prices, the general direction is still bullish. However, the current economic data is quite unstable, it is difficult to see a smooth bull market at least this year, and the price will still be dominated by wide oscillations, which is very suitable for investors to trade big shocks. Returning to the present, gold price fell back to 1950 yesterday, and it was officially announced that the pullback to the position we wanted. As for the space below, we no longer expect more. It is recommended that investors try to go long at low as well. Investors who took long positions around 1950 yesterday can continue to hold and set a good stop loss to see the opportunity of the US market.

Data: US Wholesale sales rose 2.2% MoM in September, the largest increase since January 2022, compared with the expected increase of 0.8%, and the previous value was revised to rise 2% from 1.8%. Eurozone retail sales fell 0.3% MoM in September, compared with the expected decrease of 0.2% and the previous decrease of 1.2%. It decreased by 2.9% YoY, compared with the expected decrease of 3.1% and the previous decrease of 2.1%.  

News: The IMF warned that the European Central Bank should not cut interest rates too soon and should maintain high-interest rates close to 4% throughout next year to remove price pressures. A “soft landing” is expected for most of Europe's economies, with inflation falling steadily and economic growth rebounding modestly from 1.3% this year to 1.5% next year.  

Today, investors need to pay attention to US initial jobless claims.    

Technical Analysis

Trading at the daily timeframe, the gold price continued its one-way move downward yesterday, with the high reaching 1971. Gold prices fell to 1948 at one point, and finally closed a full bear candle. This is the third consecutive decline this week, and gold prices have also successfully retraced to an important support area around 1950. Generally, the market is dominated by the bears, shifting from the previous bullish trend to the bears, which are now facing the problem of choosing the direction around 1950. If gold can gain a foothold at this level, the 1983-1997 zone can be expected to be touched above. However, if the bears continue to exert force, the important support below will be in the 1900-1910 area.

Traders can mainly buy low and sell high during the day. If the price surges to around 1971, you can still go short with small positions in the short term. The stop loss is 1976. The first target to take profit is 1958, where you can reduce your positions and move the stop loss to break even, and the second target is 1950. If the price retraces to the range of 1948-1950, you can still try to go long with small positions in the short term. The stop loss is 1943, and the first target to take profit is 1965, where you can reduce your positions and move the stop loss to break even, and the second target is 1971.

Trading Recommendations

Trading Direction: Long

Entry Price: 1946

Target Price: 1972

Stop Loss: 1942

Support: 1948.000/1930.000

Resistance: 1962.000/1982.000