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Safe-haven buying returns and gold prices regain their footing at 4100. Will the CPI data break this balance?
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market Analysis]: Safe-haven buying returns, gold price regains 4100, will CPI data break this balance?". Hope this helps you! The original content is as follows:
On Thursday (October 23), gold prices regained support from safe-haven buying after a recent correction, mainly driven by rising geopolitical tensions and expectations of new U.S. export restrictions. Market risk aversion has reignited as investors await U.S. CPI data to be released on Friday to assess the Federal Reserve's policy path.
Market background: Risk aversion dominates, gold fluctuates and stabilizes at high levels
Recently, gold has been under short-term pressure after hitting a record high of $4381.21, entering a technical correction stage. Gold prices have found support again this week as geopolitical uncertainty intensifies and U.S. policy risks rise. The U.S. government is considering imposing new export controls on some technology products, and President Trump announced new sanctions against Russian energy www.xmh100.companies, which has heightened market concerns about the prospects of global trade and supply chain security.
Against this backdrop, the appeal of safe-haven assets has increased significantly. In addition to gold, silver rose by more than 1.5% and platinum rose by 2.3%, indicating that the overall buying of precious metals has returned. Analysts pointed out that after experiencing a healthy correction in the early stage, gold is trying to regain its mid-term upward channel, and the market's tolerance for high fluctuations has significantly increased.
Well-known analyst Han Tan pointed out that gold prices are "re-finding support" after a technical correction, and "stubborn geopolitical risks will continue to maintain safe-haven buying." However, he also emphasized that www.xmh100.compared with before, the market's response to unexpected news has become more rational and there are no longer violent fluctuations.
Fundamental analysis: Policy and data resonate, pay attention to the Fed’s interest rate cut expectations
Gold has risen cumulatively this yearAbout 57%, mainly due to continued buying by global central banks, expectations of falling interest rates, and the superposition of macro and geopolitical risks. Since mid-October this year, U.S. economic data have shown mixed results, and the market has refocused on inflation indicators. CPI data, which has been delayed due to the government shutdown, will be released on Friday. Investors generally believe that the data will provide a key reference for the Federal Reserve's interest rate meeting next week.
At present, the market has almost fully digested the expectation that the Federal Reserve will cut interest rates by 25 basis points at next week's meeting. Taking into account the recent slowdown in growth momentum and rising fiscal risks in the United States, the low interest rate environment may be maintained for a longer period of time, which will provide continued support for gold, a non-yielding asset.
In addition, the United States’ recent “tariff remarks” have once again caused concerns about the prospects of global trade. Analysts believe that if the United States implements a new round of export restrictions, it may disrupt the global supply chain structure, thereby strengthening the demand for hedging. At the same time, U.S. sanctions on Russian energy www.xmh100.companies have increased uncertainty about www.xmh100.commodity price fluctuations. Overall, these factors jointly support the high and volatile pattern of gold prices.
UBS Chief Investment Officer Mark Haefele pointed out in the report that gold is still an "effective portfolio diversification tool" and believes that if the macro or political situation worsens further, gold prices will still have the opportunity to challenge the $4,700 area.
Technical analysis: The short-term rebound is repaired, and the mid-term support remains solid
From a technical point of view, the 240-minute chart of gold shows that the price has stabilized and rebounded below the middle track of the Bollinger Bands. The current three Bollinger Bands tracks are located at 4184.77, 4399.99 and 3969.55 respectively, showing that the short-term fluctuation range is still wide. The price of gold fluctuated below the mid-track, and the short-term rebound momentum increased, but there is still technical resistance in the 4200-4180 range above.
In terms of MACD indicators, DIFF and DEA are -37.03 and -26.65 respectively, and the histogram is -20.79. Although it is still below the zero axis, the green column is gradually shrinking, reflecting that the short momentum is weakening. The RSI indicator is 44.72, slightly lower than the neutral range, indicating that gold prices are still at the end of the adjustment. If it can break through the Bollinger Band in the future, it is expected to resume its mid-term upward trend.
Looking at the larger cycle, after falling back from the high in mid-October, gold has found solid support near $4,000, which corresponds to the starting point of multiple rebounds this year. If the 3960-4000 range can be maintained, the market structure will still be strongly volatile, and the short-term rebound is expected to extend to the 4180-4200 area.
Future Outlook: Data determines the pace, and the main line of risk aversion has not changed
Looking ahead, the market focus will turn to the US CPI data released on Friday. If the data is lower than expected, it will further strengthen expectations for interest rate cuts and provide additional upward momentum for gold prices; conversely, if inflation remains strong, it may temporarily suppress the upward pace of gold prices. However, from the perspective of the overall macro environment, the direction of the Fed's monetary policy to shift to easing has basically been established, while geopolitical tensions, trade frictions and political uncertainties, etc.factors continue.
Precious metal analysts generally believe that short-term fluctuations in gold may intensify, but the mid- to long-term upward logic has not changed. Under the dual support of hedging demand and capital allocation demand, gold prices may continue to maintain a high and volatile pattern above $4,000.
To sum up, it is not surprising that gold prices resumed their gains on Thursday. Global risk premiums remain high, and the Federal Reserve's upcoming decision-making meeting may become a key watershed for the next stage of the market. As long as the market remains cautious about the economic outlook, gold's safe-haven properties will continue to be favored, and its long-term bullish pattern has not yet been destroyed.
The above content is all about "[XM Foreign Exchange Market Analysis]: Safe-haven buying returns, gold price regains 4100, will CPI data break this balance?" It is carefully www.xmh100.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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