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Fundamentals

During the Asian session on Wednesday (November 29), spot gold fluctuated upwards and is currently trading around 2049. Gold prices saw very strong growth yesterday boosted by Fed officials' overall dovish remarks. Fed Governor Waller was particularly dovish. What he said once again strengthened expectations that the Federal Reserve would start cutting interest rates early. The FedWatch tool shows a 60% chance of at least a 25 basis point rate cut next May, up from 50% before Waller's remarks. This sent the US dollar index and bond yields lower across the board, boosting gold prices to quickly break through resistance at $2032 and climb to the $2042 level. In the Asian session yesterday, gold prices first rose to $2018 and then fell back to $2011, but they climbed quickly again in the US session, so we didn't make profits by placing short positions. Such a surge was unexpected as we had underestimated the strong bullish sentiment and strength after gold broke above the previous high of $2009. Of course, that's part of the deal. The market trend is the choice of the current news surface. As a trader, you can only accept your mistakes in judgment. However, the most terrible thing is that human nature magnifies your mistakes. If you go against the market outside the plan, the results can be imagined! Those who can surrender and admit defeat could be the winners.

Data: The US FHFA home price index was 0.6% in September, slightly higher than the expected 0.5% and lower than the previous value of 0.7%. The consumer confidence index of the consultation was 102, compared with the previous value of 99.1 and the expected 101.  

Speech: Fed Governor Waller hinted in support of holding the line, saying that he expects US GDP to be 1% to 2% in the fourth quarter. Data in recent weeks makes the growth in the third quarter look like a “one-off” jump. If inflation continues to fall in the coming months, it would be a good economic case to lower the policy rate.  

Today's attention: Traders should focus on the revised value of the US GDP in the third quarter.  

Technical Analysis

On the last trading day, the gold price continued to strengthen, closing a full long bull candle and achieving 4 consecutive bulls. After the rapid rally yesterday, gold prices may surge higher and then take profit. At present, the price has come to the initial resistance of the 2050 mark, and there may be a recurrence. Judging from the 1-hour chart, the MACD indicator is in the absolute overbought area, and gold prices will pull back at any time to repair it. Currently, gold prices have also fallen from the high 2052 area, and the Asian session may continue to repair the hourly pullback. The support below is initially looking at 2035, and if it breaks, it may fall towards 2018 to find support. The upside should still focus on the situation of the 2050 area, and if there is a valid breakout, the upside may be able to focus on the 2065 area. Today, traders could trade in the reference range of 2035-2055. In this range, traders should mainly buy low and sell high, and focus on participating in going short at high.

Trading Recommendations

Trading Direction: Short

Entry Price: 2050

Target Price: 2018

Stop Loss: 2055

Support: 2032.000/2018.000

Resistance: 2050.000/2065.000