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Fundamentals

During the Asian session on Wednesday, November 15, spot gold fluctuated in a narrow range and it's currently trading near 1962. Last night, Fed officials made hawkish remarks again, but the U.S. CPI data showed that inflation cooled more than expected. Investors again traded on expectations of the Fed's 2024 interest rate cuts. The CME FedWatch Tool shows that the Fed's first rate cut is expected to be advanced to June 2024. U.S. Treasury yields and the U.S. dollar fell sharply as a result, which boosted gold prices. As we emphasized yesterday, if the CPI is negative for the dollar, the gold price will hit the 10-day moving average at 1965, and it did break above that level, surging from 1944 to 1970. Then, it fell back to the 10-day moving average and swung around that level, with higher highs and higher lows. At present, $1950 has become an important support zone. Traders who entered long positions following the release of CPI data last night could make some profits. After the release of momentum yesterday, the market will mainly fluctuate in a narrow range today. It's better for us to do short-term trades. Traders, especially who do leverage and negative-sum game trading, are lonely. Everyone in the trading market wants to make money, but most of them failed. The reality is cruel. If you want to stand out, the only way is to learn from the failure to become a different you, a collection of vision, ideas, expertise and execution!

Data: The U.S. Department of Labor released a report showing that due to sharply lower energy prices, the U.S. CPI rose 3.2% year-on-year in October, a new low since July this year, lower than the expected 3.3% and the previous 3.7%; core CPI rose 4% year-on-year, a new low since September 2021, lower than the expected 4.1%. The CME FedWatch tool shows a nearly 100% possibility of the Fed keeping interest rates unchanged in December, and the first rate cut is expected to be further advanced to June next year.

News: Federal Reserve Vice Chairman Philip Jefferson said that monetary policymakers may need to take stronger action to stabilize inflation expectations when it is not clear how long high inflation may stay. Fed's Barkin said the Fed has made substantial progress on inflation. He does not believe that inflation will reach 2% steadily. More needs to be done to curb demand and inflation. The U.S. is not in a recession. Fed's Goolsbee said there are always twists and turns when inflation falls; inflation progress continues, but there is still a way to go.

Today's focus: U.S. PPI and retail sales YoY for October and EIA crude oil inventories.

Technical Analysis

Yesterday, gold prices began to rebound, and made a breakout as we expected. The U.S. CPI cooled more than expected, weighing on the dollar and boosting the price of gold. The XAUUSD pair rose as high as 1970, and then fell back down to the 10-day moving average at 1964, ultimately closing the day with a big bull candle. It has been risen for two consecutive days. The pattern is confirmed to be strong as the price once again effectively broke through the important resistance zone of 1950-1953, which now has become a support area. Bullish traders can enter long positions there. In trading, bulls are not recommended to stop loss at the important support area, and bears not to stop loss at the  important resistance area. Back to the technical analysis, the MACD indicator is near the 0 axis, and the overbought conditions also disappeared, but MACD shows serious overbought conditions and a death cross in the 1H time frame, so there will likely be a retracement in the 1H chart during the day. In the 4-hour chart, however, a MACD golden cross is widening in the oversold region. The trend is still bullish. Overall, the price will drop in the 1H time frame but will move up in a larger time frame. A retracement means the opportunity to go long. Today's trading range is expected to be 1950-1972, and aggressive traders can buy low and sell high in this range.

Trading Recommendations

Trading direction: Short

Entry price: 1972

Target price: 1950

Stop loss: 1977

Support: 1950.000, 1924.000

Resistance: 1972.000, 1988.000