October 9 Gold AnalysisOctober 9 Gold Analysis
Looking back at this week's performance, gold, driven by rising expectations of rate cuts and geopolitical risks, has performed exceptionally strongly, breaking through the $3,900 and $4,000 levels in succession and reaching new all-time highs. Despite a sharp drop in Thursday's Asian session due to the sudden news of a ceasefire agreement, gold prices quickly found strong support at the key psychological level of $4,000 and rebounded, having largely recovered the lost ground. This clearly demonstrates that the core driving forces of the current market remain unchanged, with strong buying appetite on dips and the overall upward trend remaining intact.
Analysis of Core Drivers
1. Expectations of Federal Reserve rate cuts: This is the fundamental driving force behind this surge in gold prices. Market expectations of further Fed rate cuts in October and December continue to build, reducing the opportunity cost of holding non-interest-bearing gold and providing a solid underlying support for gold prices.
2. Spreading risk aversion: The US government shutdown entered its second week, with bipartisan negotiations repeatedly breaking down, and market concerns about a prolonged shutdown intensified. This political risk has triggered widespread panic, driving continued safe-haven flows into the gold market.
3. Strong Technical Breakout: After breaking through $4,000, gold prices have confirmed entering a new price range. Although technical indicators suggest short-term overbought conditions and correction potential, the moving averages are bullish, and the upward trend remains solid.
Trading Strategy
Downward Support:
Primary support: $4,022 (the intraday low of the European session). A breakout here would indicate that market sentiment remains positive.
Core Support: $4,000. This is a key level that has been tested and successfully stabilized multiple times in the past two days and is the lifeline for determining the continuation of this upward trend. As long as gold prices hold above this level, the overall bullish outlook remains unchanged.
Upward Resistance:
Near-term resistance: $4,045 (the morning opening price and the rebound high in the Asian and European sessions). A breakout here would confirm the end of the short-term correction and reassert buying momentum.
Key Resistance: $4,060 (near the all-time high). A successful breakout above this level will open up further upside potential, with the next target likely reaching $4,100.
Trading Recommendations:
We recommend a volatile bullish outlook. Focus on stabilizing signals near the support area.
I've shared strategies earlier on my channel. Profitable traders can continue to increase their positions at lower levels, targeting 4,060-4,100.
Trade with caution and manage risk! Best of luck!
