Uncertainty due to conflicts in the Middle East, along with market expectations for a Federal Reserve rate cut, continue to boost spot gold to new historical highs. The price surged by more than 1% during trading, setting a new record high at $2774.69, and closed up 1.17% at $2774.40 per ounce. Spot silver closed up 2.33% at $34.45 per ounce.
Today, a friend asked why gold continues to break new highs despite the actual conflict between Israel and Iran not meeting expectations. The impact of Israel and Iran on the gold market is already a thing of the past. Financial markets move so quickly that one cannot afford to stand still; one must be observant and absorb effective information from all sides, rather than focusing solely on one aspect and applying it to the market.
In the near term, focus should be shifted to the upcoming release of the US September PCE price index and the October non-farm report on Thursday and Friday, as well as the Federal Reserve's interest rate decision on November 7th. In terms of geopolitics, the situation in the Middle East should also be continuously monitored.
It is reported that the number of job vacancies in the US as of September dropped to 7.443 million, the lowest level since early 2021, leading traders to increase their bets on a Federal Reserve rate cut. From this perspective, it is highly likely that the interest rate decision next month will involve a rate cut.
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The President of the Swiss National Bank stated that further rate cuts may be necessary in the coming quarters to maintain price stability.
However, the world's largest gold ETF, SPDR Gold Trust, reduced its holdings by 1.72 tons on October 29th US time, with the current holding amount at 889.78 tons. Is this a profit-taking after yesterday's gold surge? We must also be vigilant about potential market corrections.
From a 4-hour K-line perspective, the upper and lower bands of the Bollinger Bands are showing a diverging trend, with the middle band heading upwards, indicating that the market has not yet reached the end of its upward movement. The fast line shows a strong upward trend, and the MACD energy column is in an upward trend, suggesting a high likelihood of continued market growth. However, the RSI is about to show an overbought signal. Referring to the last overbought signal, the market plunged by $40, so we must remain cautious. If a correction trend appears in the 80-90 range, it is advised to reduce positions and secure profits.
Overall, with the increased expectation of a Federal Reserve rate cut and the general trend of global market interest rates moving lower, the market is likely to continue its upward movement in the long term. From the market perspective, the short-term trend will continue to break upwards, but be wary of the pullback adjustments brought about by overbought signals. Short-term positions can be taken up to $2790, with a stop-loss set at $2774. Keep an eye on the market; if a trend of pullback adjustments emerges, exit promptly, focusing on quick, short-term gains.
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