Gold Market Weekly Review: Mild Inflation Data Boosts Gold Prices, Technicals Show Bullish Trend
I. Fundamental Drivers Analysis
Spot gold continued its upward trend on Friday (September 26), successfully breaking through the recent range of $3,720-3,760. It reached an intraday high of $3,782, approaching this week’s all-time high of $3,791. Gold prices rose for the sixth consecutive week, primarily supported by the following factors:
Melting inflation data: The US core PCE price index rose 0.2% month-over-month in August (in line with expectations) and remained stable at 2.9% year-over-year, avoiding an unexpected increase, alleviating market concerns about a rebound in inflation.
Weaker US dollar: The US dollar index came under pressure after the data release, providing upward momentum for gold prices.
Sustained safe-haven demand: Geopolitical risks and trade tensions are driving safe-haven flows into the gold market.
Despite the Federal Reserve’s recent 25 basis point rate cut, officials’ statements underscored their cautious approach to the path of subsequent easing. Strong GDP data and job market performance complicate expectations for rate cuts, but gold remains resilient amidst the dual logic of moderate inflation and risk aversion.
II. Technical Structure Analysis
Breakout Signal Confirmation: The 4-hour chart shows that gold prices have effectively broken through the upper limit of the $3,760 range, reasserting short-term bulls.
Key Support Levels:
Immediate Support: $3,760 (top of the previous range)
Strong Support: $3,755 (21-period SMA) + lower limit of the $3,720 range.
Resistance and Targets:
Near-term Resistance: The historical high range of $3,780-3,791.
Post-Breakout Target: Further upside potential, targeting above $3,800.
Momentum Indicator: The RSI has risen to around 66, reflecting increasing buying momentum, but not entering overbought territory.
If prices fall back below $3,750, the short-term structure may weaken, targeting the $3,720-3,700 support range.
III. Outlook
Gold remains strong, driven by both fundamentals and technicals. After breaking out of the range, attention should be paid to the resistance at the previous high of $3,791. A weekly close above this level would further solidify the medium- to long-term bullish trend. Short-term trading strategies recommend buying on dips and maintaining strict risk management.
Six consecutive weekly gains indicate a strong bullish trend, but the probability of a technical correction is increasing after consecutive sharp gains. The daily chart reached a high near 3,783 before retreating. The 1-hour chart has formed a secondary upward trend without breaking through, indicating the initial formation of a double top pattern. If there are no major news catalysts at the beginning of the week, we recommend prioritizing the possibility of a pullback.
Key Levels
Weekly Resistance: 3791 (This Week’s High)
Early Weekly Resistance: 3771 (Monday’s Key Resistance)
Weekly Support: 3708
Intraday Support: 3720 (Bull Resistance)
Trading Strategy
◼️ Short Position: Test short positions with a light position on a rebound to around 3771, targeting 3761-3751-3745.
◼️ Long Position: Shift to long positions after stabilizing near 3720 (information based on intraday signals).
⚡ If the price breaks below 3745, further declines to 3735-3725 are possible.
Risk Warning: Be extremely cautious about the risk of chasing long positions near the 3800 level. Prioritize rebound opportunities at the beginning of the week. Strict risk management is paramount!
