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Fundamentals

During Tuesday's (October 24th) Asian session, spot gold oscillated narrowly and it is now trading at 1977. After surging for days, gold started to retrace technically yesterday. However, since the conflicts escalate, investors still hold a safe-haven demand for gold, which prevents gold from falling in the near term unless a clear signal of the situation turns better (not likely at present). Nevertheless, the safe-haven sentiment has been Price-in, and we should not chase the ascending trend, but wait until a retracement starts. Now, our investment logic should be updated, and it is better to go short at highs, because it will offer us a better profit/loss ratio compared to going long at lows before the conflicts escalate.  

Geopolitical situations: the current round of Israeli-Palestinian conflict has led to more than 6,500 deaths on both sides, Hamas released two Israeli hostages held in the Gaza Strip.

Data: the Eurozone consumer confidence index in October was -17.9, while the expected figure was -18.3, and the previous figure was -17.8. In addition, the Chicago Fed National Activity Index in September was 0.02, while the expected figure was -0.14, and the previous figure was revised from -0.16 to -0.22.

News: the media said the Bank of Japan would consider adjusting the easing policy. Yesterday, the ten-year yields of the Japanese bond soared 88 basis points, the largest increase in three months.

Today's focus: The Eurozone PMI, the U.S. PMI in October, and the Federal Reserve Manufacturing Composite Index in October. Also, the development of the situation in the Middle East should be considered as well.  

Technical Analysis

Yesterday, gold opened at lows and began to oscillate upward. It recovered the gap, and once stood on the 1983-1988 strong resistance area, but failed to stabilize, closing the daily chart with a long upper shadow. From a technical point of view, the MACD golden cross opening continues to expand, but investors need to know that gold has entered the overbought area, and there will be a narrowing of the opening, while a technical retracement is likely to take place. But in the fundamental market, technical analysis is only a reference. If the conflict escalates again, gold may enter the deep overbought area. Thus, the profits will be higher when investors sell at highs. At the moment, investors need to trade the oscillating pattern, and try to buy low and sell high under the oscillations.

Intraday operation: high throw low suck mainly. Intraday if the fall to 1955 a line, you can still short-term light position to try more, stop loss unified look at 1950 a line, the first target of profit look at 1972 a line, reduce the position and set the capital preservation single, the second target look at 1985 a line. If the day up to 1985 a line, you can still short light test short, stop loss unified look at 1988 a line, take profit first target look at 1965 a line, reduce positions and set up capital preservation single, the second target look at 1955 a line.

Trading Recommendations: Buy low and sell high. If gold retraces to 1955 today, investors could go long with small positions later, and set the stop-loss at 1950. To take profits, the first target will be at 1972, where they can reduce the position size and move the stop-loss to breakeven, and the second target can be fixed at 1985. Nevertheless, if gold surges to 1985, investors could go short with small positions, and set the stop-loss at 1988. To take profits, the first target will be at 1965, where they can reduce the position size and move the stop-loss to breakeven, and the second target should be at 1955.

Trading Recommendations

Trading direction: Short

Entry price:1985

Target price: 1955

Stop loss: 1988

Support: 1965.000/1953.000

Resistance: 1983.000/1988.000