"US Set for 0.25% Rate Cut Next Month; Gold Awaits Adjustment for Climb"

October 14th: Last week in the gold market: International gold/London gold bottomed out and rebounded, closed higher in a T-shape, did not hold steady below the 5-week moving average support, the bullish strength remains relatively strong, and the overall bullish trend remains unchanged. Inflation is also further decreasing, supporting the prospects for rate cuts in the future market, thus for gold prices, it will continue to be treated as bullish and upward.

In terms of specific trends, gold prices opened at $2,650.53 per ounce at the beginning of the week, then encountered resistance and pressure to fall back, touched $2,604.75 on Tuesday, and the bearish momentum eased. On Wednesday, it maintained pressure and weakened, on Thursday it briefly weakened slightly to refresh the Tuesday low, touched the weekly low of $2,604.52, then rebounded strongly and closed above the middle rail in a positive trend. On Friday, it continued the rebound momentum, further strengthened, recorded the weekly high of $2,661.11, and finally encountered resistance and retreated again, closing at $2,656.55. The weekly amplitude was $56.59, it closed up by $6.02, with an increase of 0.23%.

In terms of impact, the US dollar index and US Treasury yields continued to rebound and close higher, exerting pressure on gold prices, but gold prices also received buying support and rebounded and strengthened.

In the first half of the week, due to the fading bets on the Fed's substantial rate cuts and traders taking profits, as well as technical resistance, it continued to fall under pressure;

In the second half of the week, the US August wholesale sales monthly rate was better than expected, benefiting gold prices. The Fed's meeting minutes showed disagreements on the extent of the rate cut in September and still supported rate cuts. Moreover, the US September unadjusted CPI annual rate recorded 2.4%, marking the sixth consecutive month of decline. Additionally, the number of initial jobless claims in the US recorded 258,000 people, the highest since the week of August 5, 2023. Boosting gold prices to rebound and strengthen after touching the weekly low, on Friday, the US September PPI annual rate and monthly rate were overall lower than the previous value, further reducing inflationary pressure, enhancing rate cut expectations, and the decline in the University of Michigan consumer confidence index in October also boosted gold prices to strengthen again, ultimately closing higher.

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Looking forward to this week on Monday (October 14th): International gold opened with resistance and is weakly operating, still suppressed by the resistance of $2,660 and has not obviously strengthened. However, technical indicators and fundamental factors have already strengthened, so its future market outlook remains bullish. Therefore, even if it weakens, it is a range of fluctuations, after which it will once again welcome a bullish climb.

The US dollar index daily chart shows that the bullish momentum has weakened, but it has not yet fallen below the 5-day moving average, with the bulls still in control. However, the trend is approaching the 200-day moving average resistance, with limited short-term upward space, or there may be a need to fall back. Although the weekly chart has encountered resistance from the middle rail, the short-term moving averages and the 200-week moving average provide clear support, and the auxiliary indicators have also turned into a golden cross bullish signal. The market is likely to strengthen further, so before falling below the 200-week moving average, it will still be treated with fluctuations or rebound. This will limit the gold price bulls, keeping it in a range of fluctuations and adjustments.

The US Treasury 10-year yield, on the daily chart, the bullish momentum has stabilized somewhat, but it is also approaching the 200-day moving average resistance, with limited rebound space, which will reduce the bearish pressure on gold prices. However, the weekly chart trend has broken through the middle rail resistance, and the auxiliary indicators have also turned into a bullish signal development, with a short-term expectation to strengthen further, which will limit the rebound strength of gold prices.

Therefore, in summary, the US dollar and US Treasury yields have remained strong in recent operations, but gold prices have not generated a sustained downward trend, so the future market for gold prices will mainly be oriented towards fluctuating adjustments or strengthening and climbing again.

Today's focus will be on the US September New York Fed 1-year inflation expectation. According to the preliminary value of the US October one-year inflation rate expectation published last Friday, although there is an expectation of an increase, the consecutively published September CPI and PPI continue to show a decline in inflation. Therefore, even if the data strengthens, gold prices will be fluctuating or strengthening again.Fundamentally, the latest Federal Reserve inflation indicators continue to show a decrease in inflation, which alleviates the bearish pressure from the U.S. non-farm data at the beginning of the month. Additionally, the minutes from the Federal Reserve and recent speeches by Federal Reserve officials still support the subsequent interest rate cut cycle. Geopolitical risks and concerns for safe-haven assets also diminish Powell's views on not being in a hurry to cut rates. Therefore, although the expectation for a substantial rate cut of 50 basis points has been reduced, as long as the interest rate cut cycle continues, the policy of rate cuts is ongoing, and the gold price is expected to remain bullish in the future.

Moreover, despite the overall strength of the U.S. economy, the Federal Reserve is still in a policy dilemma. Slowdowns in industries such as real estate lead it to consider rate cuts, and this policy inclination will continue to support the upward movement of gold prices. In the coming months, gold will continue to be supported by global macroeconomic data and geopolitical risks.

In terms of demand, global gold ETF holdings increased by nearly 95 tons in the third quarter, marking the first positive contribution to gold demand in ten quarters. Furthermore, as the festive season approaches, gold demand in the Indian market is also picking up, with traders charging premiums for the first time in two months, further boosting physical demand for gold.

Therefore, in this environment, it implies that the gold price has not yet reached its peak. Zhang Yaoxing still believes that it is appropriate to continue buying on dips. The outlook for the next year or so remains bullish.

Technically: On the monthly chart, gold prices continued to rise strongly in September, maintaining bullish momentum. Although there has been a pullback, it is relatively small compared to the September increase and has only touched the support of the upper Bollinger Band, not fully turning bearish. The bullish momentum still holds the advantage. Moreover, the distance from the 5-month moving average bullish trend support is also quite far, so given the large space below, any bearish pressure will be absorbed, and the trend will continue to maintain a bullish trend for upward development. Therefore, this month, one can still rely on the support above the 5-month moving average to enter long positions with a bullish outlook, waiting to set new historical highs.

On the weekly chart: Gold prices bottomed out last week and closed higher without breaking the support of the 5-week moving average. The lower shadow of the pullback also suggests a signal that the short-term correction has ended. The 10-week moving average also maintains a good upward and upward trend support, so the bullish trend remains good, and the short-term pullback is still creating entry opportunities for the bulls. Medium-term operations will still rely on the 5-10 week moving averages for bullish support, waiting to set new historical highs.

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On the daily chart: Gold prices have encountered resistance at $2660 and continue to fluctuate below this level. However, the short-term moving averages on the main chart have turned into support, and there is also support for the bullish arrangement of the middle rail and 30-day moving averages below. At the same time, the ZZ indicator has also shown a bottom, so even if the market continues to operate below the resistance, it is a range-bound adjustment, and after the adjustment, it will once again welcome a bullish climb. Therefore, the support of the 5-10 day moving averages below and the support of the 30-day moving average are opportunities to enter long positions with a bullish outlook.

For specific real-time trading instructions, please pay attention to the guidance information in the live account.

Intraday trading ideas for reference:International Gold: Focus on support at $2,642 or $2,631 for a potential rebound; watch for resistance targets at $2,654 and $2,661;

International Silver: Focus on support at $30.95 or $30.70 for a potential rebound; watch for resistance targets at $31.40 and $31.65;