On Tuesday, the US Dollar Index continued its upward momentum, reaching a high not seen in over two months, and closed up by 0.01% at 103.23. The benchmark 10-year US Treasury yield fell by 6.86 basis points; the two-year US Treasury yield, which is more sensitive to monetary policy, fell by 1 basis point. The overnight October New York Fed Manufacturing Index unexpectedly fell back into contraction territory, suggesting that the US economic situation may be weaker than anticipated, although there was some improvement in the employment sub-index. Xu Gucheng believes that the dual mandate of the Federal Reserve is still steadily moving towards balance.
Today will see the release of the US September retail sales monthly rate, colloquially known as the "terror data", as well as the change in the number of US initial jobless claims and the US September industrial production monthly rate. In addition to economic data and monetary policy, geopolitical risks are also an important factor driving gold prices. This event has intensified the market's risk-aversion sentiment. The increasing attention of investors to the situation in the Middle East has led to an increased demand for gold as a safe-haven asset.
Gold broke through the historical high of 2685 in the short term. Bears significantly increased their positions at 2684-2685, serving as the last major defense. Once this level is breached, the bearish inventory quickly diminishes, and bears may avoid short-term positions. Therefore, Xu Gucheng believes it is important to pay attention to whether gold can stabilize above this price. Above the historical high, the first target for bulls is the 2699-2700 integer level, and they continue to add positions upwards, with the short-term target for bulls extending to around 2714. Although the long-term target of 2734 has seen a reduction in bullish inventory, its presence is prominent, and Xu Gucheng indicates that it remains a medium-term target.
Gold: It rose again yesterday, combining the morning's breakthrough, reaching a high of 85 in the US session before retreating for correction, and touching a low near 66 before rising again in the morning. In the short term, it continues to form an upward trend, and it has once again broken through the previous shoulder position platform, giving the market more interpretations for further new highs in the future. Gold prices have risen for the third consecutive day and are testing historical highs again. Expectations of rate cuts by major central banks, as well as geopolitical risks triggered by ongoing conflicts in the Middle East, are key factors driving capital flows into gold. Even though gold is bullish in a bullish trend, do not chase long positions at such high levels. In the European session, if 2687 is not broken, a triple top pressure can be formed for a downward space. The operation is suggested to short around 2685, with a target of 2665-2650, and a stop loss at 2696.
Crude Oil: The weekly API crude oil inventory data change was completely different from expectations, and the demand for crude oil terminal products remains strong, indicating that US crude oil demand is still resilient. However, it still needs the support of evening EIA data to promote a rebound in oil prices. The upward movement of oil prices may depend on the escalation of conflicts, but the trend of the oil market balance next year is most likely to be over-supplied, with US oil still targeting a range of $71.96-72.28 per barrel, stabilizing near the support level of $69.80. Failing to break through the support level twice indicates the formation of a small double bottom, which will be confirmed when the contract further rises to $71.50. Wave C may end near $69.31, or it may go far below this level. Regardless of the end point of this wave.
The expected decline is likely to be interrupted by a rebound or consolidation. If it breaks through $69.31, it may confirm the target range of $67.06-68.38. On the daily chart, the downward trend starting from the high of $84.52 on July 5th has resumed within the downward channel, indicating a target of $63.53. The exact route to achieve this target is unclear. The current guess is that after a weak rebound, the decline will continue.