Last Friday, gold closed at $2,721, driven by increased global uncertainty and expectations of monetary easing, gold prices hit a historical high, breaking through $2,700 for the first time. Against the backdrop of turbulent geopolitical and economic situations, investors flocked to buy gold, leading to a surge in demand for safe-haven assets. With the Federal Reserve expected to cut interest rates in November, the non-yielding appeal of gold strengthens, supporting further price increases. Xu Gucheng stated that last week, gold surged, closing higher on all four trading days except Monday, breaking through the historical high of $2,685 on Thursday, and accelerating the rise on Friday, closing the weekly chart above $2,720 with a large bullish candle. On Monday (October 21), in the Asian morning session, spot gold continued its upward trend, with the gold price just touching a historical high of $2,724.51 per ounce.
Expectations of loose monetary policy also further drove the rise in gold prices. Israel and its enemies Hamas and Hezbollah continue to threaten ongoing battles, intensifying geopolitical tensions, prompting investors to seek safe-haven assets like gold, driven by risk aversion and concerns about global market instability. It is expected that the LPR announced on October 21 will decrease by 0.2-0.25 percentage points. A more significant cut in the LPR may further push up gold prices at the beginning of this week.
U.S. Treasury yields fell on Friday, with the market consolidating after a sharp rise in yields over the past month, as it is expected that the Federal Reserve will be less dovish due to the U.S. economy still being stronger than previously expected. After data showed that employment growth in September far exceeded expectations, the market generally believes that the Federal Reserve is unlikely to cut interest rates by 50 basis points again. Federal Reserve Chairman Powell also refuted the possibility of further significant rate cuts. Xu Gucheng expects the Federal Reserve to steadily cut rates by 25 basis points at the next meeting. However, attention is also being paid to geopolitical tensions in the Middle East and the strength of the risk asset market.
Gold: From a technical perspective, according to the 1-hour chart, gold prices are trading within an upward channel. The 14-hour Relative Strength Index (RSI) supports the bullish tendency as it approaches overbought conditions. Therefore, gold bulls will seek to continue the current rebound trend and rise towards $2,736 per ounce, or even higher at $2,754 per ounce. In the short-term cycles, both the 4-hour and 1-hour charts also show a bullish pattern. There are no clear signs of a top reversal. Therefore, the main idea is to continue to look for higher prices. Do not assume that prices will fall just because they are high. Keep guessing the top. Always trade within the plan. Based on the overall strong trend of gold prices, corrections are also accumulating momentum for further rises, and with the principle of gradually raising lows, from the daily chart, gold remains in an uptrend in the long term. Previous market conditions touched the upward trend line and rebounded effectively, with considerable rebound strength. In terms of operations, Xu Gucheng suggests buying on dips at 2704, with a defense at 2700, and waiting for a more conservative long position near 2696, with a defense at 2691.
Crude Oil: Crude oil experienced a volatile downward break last Friday, with pressure at the $71.2 level causing a回落 to the lowest point touching the $68.8 area. After the crude oil fell sharply at the daily level with a large bearish candle, the oil price broke below the previous lower shadow line, and the bearish trend in oil prices continued, with the Bollinger Bands indicator's three tracks opening and diverging downward. Last week, the unexpected decrease in U.S. crude oil inventories boosted oil prices. Although the tense situation in the Middle East has eased somewhat, the market still worries about future supply disruptions. The fundamentals of the global energy market remain pessimistic, especially as the slowdown in global demand puts pressure on the oil market. The decline in inventories and potential supply risks provide short-term support for oil prices. In terms of operations, Xu Gucheng suggests focusing on high selling and low buying, and currently recommends considering short positions at the 72.0 level. A more conservative long position is advised at the 68.8 level.