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Fundamentals

During Wednesday's (October 11th) Asian session, spot gold oscillated and it is now trading at 1860. In the supply shock of bond issuance, good economic data, and the Fed's hawkish attitude, the long end of the U.S. bond yields hit new highs for more than a decade in the first week of October. Nonetheless, last night's Fed official's statement was dovish, releasing the signal of softening monetary policy. Also, the market interpretation is that there will be no more interest rate hikes during the year, and interest rate hikes will be suspended in November. Now, the precious metals are rebounding, and investors should go long at lows. Moreover, it is important to wait for the Fed minutes and Thursday's CPI inflation data.

Data: IMF released the latest issue of the "World Economic Outlook Report", showing that global economic growth is expected to slow from 3.5% in 2022 to 3.0% in 2023 and 2.9% in 2024. Compared to July's expectation, the 2024 forecast was lowered by 0.1%. Meanwhile, U.S. economic growth is forecast at 2.1% in 2023, with growth slowing to 1.5% in 2024.

News: Atlanta Fed President Bostic said there is no need to raise interest rates again, the impact of high interest rates on the economy has not yet emerged. In addition, according to Minneapolis Fed President Kashkari (Hawkish), higher U.S. bond yields imply that the Fed needs to slow the pace of interest rate hikes.

Today's focus: The U.S. PPI data.  

Technical Analysis

Gold oscillated yesterday and once dropped to 1853, which was in line with our expected level (below 1854) to go long. Nevertheless, the rebound was insufficient. The highest level reached 1865 but was lower than our first target (1870) to take profits. As a trader, making a good plan for an unknown future is vital, and the market will give you the answer. Furthermore, the profits are unpredictable, and the only certain thing is the loss. Yesterday, the maximum rebound was 10 dollars, not bad. For today, gold will move upward slowly with oscillations, and the retracement is a good opportunity to build a position. Thus, investors should go long at lows, and if investors want to trade short positions, be sure to trade a small position with stop-loss, and avoid chasing the bears. Then, go short when gold rebounds to the key resistance level, because patience is extremely important for trading.

Trading recommendations: Buy low and sell high. If gold retraces to 1855 today, investors could go long with small positions, and set the stop-loss at 1850. To take profits, the first target will be at 1870, where they can move the stop-loss to breakeven, and the second target can be fixed at 1884. However, if gold appreciates to 1880, investors could go short with small positions, and set the stop-loss at 1884. To take profits, the first target will be at 1870, where they can move the stop-loss to breakeven, and the second target will be 1855.

Trading Recommendations

Trading direction: Long

Entry price: 1855

Target price: 1885

Stop loss: 1850

Support: 1855.000/1834.000

Resistance: 1870.000/1884.000