Last night, the FED made several statements that were no longer as hawkish as before, instead turning to support an interest rate cut in December to rescue the labor market.
During the night, gold prices surged from the 409x range to 414x this morning as investor expectations for an interest rate cut jumped sharply from 69% to 80%, according to the FEDWATCH tool.
FED members now believe that labor data should be the primary concern, as it could decline suddenly and cause more severe damage to the economy than inflation.
The FED is confident it can bring inflation back to the 2% target without further tightening interest rates at this time.
Therefore, gold prices in the short term are likely to be strongly supported, at least until a FED member makes a statement opposing the planned December rate cut.
Technical analysis:
In the short term, buying should only be considered when gold undergoes a pullback. Two zones to consider for BUY positions:
1: Fibonacci retracement 0.5–0.618 around 4109–411x
2: The 4100$/ounce zone.
Trí Hùng
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