Gold prices continue to rise
A Shift in Market Expectations
Gold prices strengthened this week as investors increased their expectations for a Federal Reserve rate cut in the upcoming December meeting. This followed comments from FOMC member John Williams on Friday, indicating that a 25–basis point rate reduction may be possible. Rate-cut expectations had fallen to 30% last week after the delayed September jobs report (postponed due to the U.S. government shutdown) showed stronger-than-expected figures, with the U.S. economy adding 119,000 jobs compared to forecasts of 51,000. However, following Williams’ remarks, expectations surged again, reaching nearly 80% today according to CME Group.
Political Uncertainty and Military Developments
Gold also benefited from heightened geopolitical tensions across several regions. Relations between Japan and China have deteriorated recently, prompting China to advise its citizens against traveling to Japan and to ban imports of Japanese seafood. Both nations have also stepped-up military activities, China announced the deployment of surveillance vessels in the East China Sea, while Japan revealed plans to station missiles in the region near Taiwan.
In the Middle East, tensions escalated further following news that Israel had assassinated a senior Hezbollah commander. Meanwhile, the situation remains unclear regarding the Russia–Ukraine conflict, as discussions continue around the U.S.-proposed peace plan, with Thursday set as the deadline for reaching an agreement.
Gold Prices – Technical Analysis
On October 30, gold’s upward trend stalled and shifted into a sideways pattern, forming lower highs and higher lows. The price is currently trading within the trading zone located between $3,900–$4,250. A daily close above the high end of this zone may encourage bulls to resume the upward trend, potentially driving the price toward $4,500. In this scenario, the resistance level at the October 20 high of $4,380 should be closely monitored.
Levels to Watch in the Opposite Scenario
A daily close below $3,900 may encourage bears to initiate a downward sentiment, potentially toward $3,675. In this case, the support level at $3,791 should be watched carefully.
Gold – Daily Price Chart
Gold prices continue their upward trend
What to watch:-
Investors await the release of some major economic reports, which were delayed due to the federal government shutdown. Data on PPI (1730 UAE Time), retail sales (1730 UAE Time) and S&P/Case-Shiller home price (1800 UAE Time) will be released today.
Producer prices in the US, which declined 0.1% in August, are expected to rise by 0.3% in September. Analysts expect retail sales in the US to grow 0.4% in September, decelerating from 0.6% in August. The S&P CoreLogic Case-Shiller home price index, which surged 1.6% year-over-year in August, is projected to rise by 1.4% in September.