#GoldTechnical Analysis#24K99 News On Wednesday (October 9), in the early European session, spot gold suddenly plummeted in the short term, with the price just breaking below $2610 per ounce. FXStreet analyst Haresh Menghani wrote on Wednesday, analyzing the technical trends of gold prices.
(Source: 24K99) 15-minute chart for spot gold.
Menghani wrote that on Wednesday, due to market expectations of a small rate cut by the Federal Reserve, gold prices still faced some selling pressure, currently above a three-week low (near the $2605-2604 per ounce area touched yesterday). Hopes of a cease-fire between Hezbollah and Israel further undermined gold.
Menghani pointed out that traders are looking forward to the FOMC meeting minutes for short-term trading catalysts.
Spot gold closed sharply lower on Tuesday, down $20.44, a decrease of 0.77%, at $2621.84 per ounce. The price of gold hit a low of $2604.50 per ounce on Tuesday.
According to the CME's 'FedWatch' tool, the market no longer expects a 50 basis point rate cut by the Fed in the November meeting, but believes there is an 87% chance of a 25 basis point cut.
According to a report by Reuters in the United Kingdom on Tuesday, Na'im Kassem, the number two figure in Hezbollah, said in a speech broadcast on October 8 that Hezbollah supports efforts to achieve a ceasefire in Lebanon. For the first time, he did not mention that the Gaza ceasefire agreement was a precondition for Hezbollah to stop firing at Israel.
At 02:00 on Thursday Beijing time, the United StatesThe Federal Open Market Committee (FOMC)(FOMC) will release the minutes of the September monetary policy meeting. The Fed's September meeting almost unanimously agreed on a 50 basis point rate cut.
Menghani wrote that investors are now focusing on the minutes of the September FOMC meeting to look for clues about the future rate cuts path. US consumer inflation data and US Producer Price Index (PPI) will be released on Thursday and Friday respectively.
In addition to the Fed meeting minutes, several Fed officials will deliver speeches on this trading day, including Fed Vice Chair Jefferson, Richmond Fed President Barkin, Atlanta Fed President Bostic, Dallas Fed President Kaplan, and Chicago Fed President Evans.
How to trade gold?
Menghani pointed out that from a technical perspective, the price of gold fell below $2630 per ounce on Tuesday.Resistance(or the lower end of the short-term trading range), may be seen as a new trigger by bearish traders. However, the oscillating indicators on the daily chart, although losing traction, have not confirmed a bearish trend. Therefore, the cautious approach is to wait for some follow-up selling and a drop below the key level of $2600 per ounce, and then prepare for further decline.
After that, the price of gold may continue its corrective downward trend and fall towards the next important support level near $2560 per ounce, then move towards the $2535-2530 per ounce region and the psychological level of $2500 per ounce.
On the other hand, Menghani added that the area near $2630-2635 per ounce now seems to be a short-term obstacle. Any subsequent rise could be seen as a selling opportunity, keeping the uptrend still limited near the level of resistance around $2657-2658 per ounce.
If the price of gold continues to strengthen, it may be pushed up into the resistance range of $2670-2672 per ounce. Once this range is broken, bulls may challenge the historical high near $2685-2686 per ounce touched in September. Following closely is the $2700 per ounce level, breaking through which could lay the foundation for continuing the upward trend for several months.
At 15:11 Beijing time, spot gold was trading at $2609.64 per ounce.
