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Fundamentals

During the Asian session on Wednesday (October 25), spot gold fluctuated in a narrow range and is currently trading around 1975. Gold prices retraced yesterday, which fully confirmed our expectations, and the lowest pullback to 1954 was basically in line with our expected 1955. Also, we emphasized going long after the price correction. If friends who opened the position have fulfilled the first profit target, they may have already made a profit of about $20. was mainly due to technical pullback demand met with better-than-expected US economic data, which boosted the rebound in the dollar index and allowed us to see a sharp correction in gold prices as expected. In addition, we stress again that the need for safe haven remains as geopolitical conflicts continue. In an event- and news-driven market, investors should also pay attention to short-term cooling demand and overbought technical pullbacks. The grasp of the trading rhythm is particularly critical, do not sell into corrections, what you should do is just follow your own plan. If you see unplanned fluctuations in the gold price, then just let it go with no regret, but you should be decisive when the scheduled positions come. Trading is nothing more than taking profit or stopping loss, we should just trade as planned, and trade the plan.

Data: The initial Markit manufacturing PMI in the US came in at 50, better than expected at 49.5, and the final value in September was 49.8. The initial service PMI came in at 50.9, compared with the expected 49.8, and the final value in September was 50.1. The initial composite PMI was 51, compared with the expected 50, and the final value in September was 50.2. Last week, US Redbook commercial retail sales rose 5% YoY from 4.6% in the previous month. Eurozone's initial manufacturing PMI for October was 43, compared with the expected 43.7 and the previous value of 43.4. The initial PMI of the services sector was 47.8, compared with the expected and the previous value of 48.7. The initial composite PMI was 46.5, which was the lowest since November 2020, compared with the expected 47.4, and the previous value of 47.2.

Geographically: The current round of Palestinian-Israeli conflict has killed more than 72,500 people on both sides.

Data to watch for investors today include EIA crude inventories and the total number of US annual new home sales for September. In addition, attention also needs to be paid to the situation in the Middle East.

Technical Analysis

Trading at the daily timeframe, gold prices showed a one-way move downward yesterday, with the lowest falling to 1954 in Europe and the United States sessions, which was then reversed quickly, gradually recovered losses, and finally closed a Doji Star with a long lower shadow. Gold prices showed a Doji star at a high level, coupled with the short-term overbought phenomenon, the demand for technical corrections was still strong. However, as the current decline may not be smooth, the trend of gold prices will still be mainly volatile, that is, the so-called wash trade. Once it is over, the trend of gold prices may become smoother. The one-way move trend can be expected, and you could go short in this bearish trend. However, we should better focus on the current situation and try to buy low and sell high but avoid thinking about one-way profits. Greed is also a fatal drawback. Therefore, we should make the money we know, and leave the rest to the market. Investors can still buy low and sell high around yesterday's range of 1953-1983. Currently, as the market is volatile and repeatedly oscillating, the stop-loss order will be triggered. Therefore, we emphasize again that investors must not sell into corrections and just wait patiently.  

Traders can mainly buy low and sell high during the day. If the price retraces to around 1953, you can still go long with small positions in the short term. The stop loss is 1949. The first target to take profit is 1973, where you can reduce your positions and move the stop loss to break even, and the second target is 1983. If the price rises to 1983 during the day, you can still go short with small positions in the short term. The stop loss looks at 1988. The first target to take profit is 1963, where you can reduce your positions and move the stop loss to break even. The second target is 1953.

Trading Recommendations

Trading Direction: Short

Entry Price: 1983

Target Price: 1953

Stop Loss: 1988

Support: 1965.000/1953.000

Resistance: 1983.000/1988.000