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Fundamentals

During Tuesday's (November 14th) Asian session, spot gold oscillated narrowly, and it is now trading at 1947. There was not much news yesterday, and the main clues will be the upcoming San Francisco talks between the Chinese and U.S. chiefs, as well as Moody's downgraded the U.S. credit rating outlook to negative. Besides, dollars retraced slightly yesterday, and the gold price rebounded as expected. Also, the oscillation range is in the expected 1924-1950, and the second take-profit target is reached if investors trade the bullish pattern. Yesterday, gold closed higher with a long lower shadow, indicating that the trend was stabilized, and investors should not go short. Since heavy CPI data will be released tonight, the market will stay cautious, and thus there won't be much space to trade. Nevertheless, in the early morning, the New York Fed inflation survey demonstrated that inflation expectations in October softened overall. If it can exceed expectations, there will be space above for gold. Now, gold is oscillating near the 5-day SMA, and the upper target to focus on is the 10-day SMA (1965), while the lower target to be concerned will be the support at the 60-day SMA (1924). Many investors wonder whether we should change the plan, and my suggestion is to keep it. The plan was made carefully, rationally rather than emotionally, and it is painful to plan during the session, which is worse than gambling. Currently, we must implement our plan. No plan can guarantee earnings, but you will find out that the trading pattern is amazing in the long run, and the trade is easy. Without massive considerations or complicated human nature, trading will be simple and suitable!

News: The New York Federal Reserve Survey of Consumer Expectations reported that inflation expectations were generally softer in October despite rising expectations of higher gasoline prices in the future. Meanwhile, the outlook for employment and personal finances was stable. The report said the expected increase in the housing market remained at a modest 3% in October, while expectations for future gasoline price increases were revised up to 5% from 4.8% in September.

Today's focus: U.S. core CPI data for October and Fed officials' speeches, with an emphasis on today's China-U.S. chiefs' talks in San Francisco.

Technical Analysis

Gold rebounded from lows yesterday and stopped at 1950. Then, it dropped to the 5-day SMA (1947) and oscillated. We explained yesterday that we could buy at lows despite a weak pattern, and the profits were considerable. In addition, gold oscillated narrowly near the 60-day SMA in the 1H chart, and the golden cross in the MACD expanded. Since gold does not reach the overbought area, and it will hit the resistance at 1965 if it stands above the 60-day SMA. However, if gold declined, investors must focus on the support near 1924, where investors should buy low and sell high instead of chasing the trend!  

Trading Recommendations: Buy low and sell high. If gold rebounds to 1965, investors could go short with small positions, and set the stop-loss at 1970. To take profits, the first target will be at 1950, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1945. Meanwhile, if gold plunges to the range between 1920 and 1925, investors could go long with small positions, and fix the stop-loss at 1918. The first target price to take profits will be 1938, where investors can reduce the position size and move the stop-loss to breakeven, and the second target price is 1946.

Trading Recommendations

Trading direction: Long

Entry price: 1923

Target price: 1946

Stop loss: 1918

Support: 1938.000/1924.000

Resistance: 1950.000/1965.000