Geopolitical Tensions Intensify: Will Gold Hit New Highs?
Black Friday ultimately did not make a comeback, seemingly becoming a legend. Last Friday, the last trading day, the U.S. PPI data was released, showing a retreat in U.S. inflation, which supports the continuation of rate cuts. Influenced by the rate cut, gold began to rise in the short term. The consumer confidence data released at 10 p.m. showed that U.S. residents' consumption confidence is not very strong. This rate cut of 50 basis points did not make consumers more confident in consumption, meaning it did not stimulate the economy. Therefore, there may be further rate cuts ahead. However, will rate cuts necessarily lead to new highs in gold?
I also mentioned in last Friday's article how gold rose previously. After the U.S. interest rate meeting in September lowered rates by 50 basis points, the dot plot indicated that there would be 75-100 basis points of rate cuts for the rest of the year, which led to the rise. Now, although the data has comprehensively strengthened the expectation that the Fed will cut rates, what about the basis points? The expectation for a rate cut in November is still 25 basis points, and the expectation for a 50 basis point rate cut remains at 0. Therefore, it does not meet the conditions for breaking through the previous high.
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On the other hand, there is the issue of geopolitical conflict. Over the weekend, everyone should have watched videos about the escalating conflict in the Middle East, and the sentiment of risk aversion has also increased. So, with the sentiment of risk aversion and the expectation of Fed rate cuts, gold's upward momentum is indeed very strong at the moment. Therefore, we can only look at gold as bullish in the short term, but don't rush for new highs, as gold does not yet meet the conditions for new highs.
Let's talk about the technical aspects. Last week, because the article was written early, it only mentioned the strong support at 2634, and you could go short if it broke. However, in my live broadcast in the morning, I clearly mentioned the pressure at 2644. After breaking through the pressure, the market will continue to rise. Let's take a look at today's daily candlestick chart. The daily chart shows two strong bullish candles breaking through the upper Bollinger Bands and the strong pressure of the 10-day moving average. The moving averages have shifted from pressure to support, and the overall upward momentum is very strong. It is likely to continue rising in the short term, so pay close attention to the support of the moving average at 2644 and the support of the Bollinger Bands at 2634.
At the 4-hour level, the 4-hour candlestick chart currently shows an upward trend. The key support to focus on during the day is the same as the daily chart, which is 2644 and 2634. As long as the support is not broken, continue to look bullish on gold. The MACD fast and slow lines have already entered the positive zone above the zero axis, and the trend is about to shift to an upward trend.
In summary, gold is currently driven by the intensification of geopolitical conflicts, coupled with the strengthening of rate cut expectations. The upward momentum of gold is very strong. The candlestick charts all show that gold is set to continue moving northward. Therefore, rely on the support at 2644 to look bullish in the short term. However, there are no key data or events today, so the intraday fluctuations in gold will not be too large. The first target for the rise is to look at last Friday's high point!