On Wednesday (October 2), the spot gold price fell to $2,643.68 per ounce. The reason for dampening the rise in gold prices was the strengthening of the rival safe-haven currency, the US dollar.
Gold prices fell, taking a breather after rising in the last session as the Middle East conflict escalated, as traders awaited more clues on United States interest rates.
The author believes that gold prices are still expected to reach recent highs due to fears of further escalation in the Middle East, including retaliation from Israel.
In the longer term, if the data is weak, increasing the likelihood of a 50bp rate cut in November, gold could hit another all-time high.
Gold prices have risen 28% so far this year, partly due to the Federal Reserve’s monetary easing, which has strengthened the relative appeal of zero-yield gold.
Keep an eye on the data, including Friday’s non-farm payrolls, as well as comments from Fed officials on Wednesday.
Gold technical analysis
From a technical point of view, the strong overnight rally in gold prices strengthened the short-term ascending channel resistance and turned to support near the $2625-2624 area.
This area should now be a key pivot point and a decisive break could trigger some technical sell-offs.
The subsequent decline could drag gold below the $2,600 mark, towards the next relevant support near the $2,560 area, and then to the $2,535-$2,530 area.
On the other hand, the $2672-$2673 zone could continue to be the $2685-$2686 zone, which is the immediate resistance level before the all-time high set last week.
This is followed by the $2,700 mark, which if breached will be seen as a new trigger for bullish traders and set the stage for a continuation of the established multi-month uptrend.
Silver technical analysis
Silver has risen 0.2% to $31.73 in recent days, and it is likely to perform better than gold on the back of the stabilization of the industrial metals sector.
Especially given the relatively low price of silver relative to gold, the price of silver could reach $40 per ounce next year.
At 21:10 Hong Kong time, spot gold was at $2651.50 an ounce.
Author: Zhou Tong (Analyst) 02-10-2024
#The above is only the author’s personal opinion and has nothing to do with the company’s position.
#The policy recommendations are for informational purposes only, there are risks in entering the market, and investment needs to be cautious.