Next Monday, gold prices will continue to trade at low levels.
Gold prices closed slightly higher on a weekly basis, maintaining a strong bullish trend.
After briefly dipping to 3631 on Friday, the index quickly rebounded, showing a gradual upward trend.
The daily chart closed with a large, unbroken bullish candlestick.
Despite some short-term pullbacks, the bullish trend remains intact, and bullish sentiment remains optimistic for next week.
On the 4-hour chart, the moving averages have formed a golden cross again, and prices have continued to rise, breaking through the midline, showing strong momentum.
However, the Bollinger Bands have not yet opened, making direct buying difficult.
Following support, watch for 3676-72 and 3661-59. Trading strategies suggest buying based on pullbacks, and then gradually targeting 3695 and 3708 above.
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1: Gold prices rose slightly on Friday, closing around $3685, but the overall market lacked sustained strong buying momentum.
2: The Federal Reserve announced a 25 basis point interest rate cut at its September FOMC meeting, lowering the federal funds rate to a range of 4.00%-4.25%. This move has been fully priced in by the market.
3: Fed Chairman Powell’s post-meeting comments were less dovish than expected. He described the rate cut as a “risk management cut,” with the market pricing in a 91% probability of a 25 basis point cut in October and nearly an 80% probability of another cut in December.
4: Geopolitical tensions provided safe-haven support for gold.
The escalating conflict between Russia and Ukraine, with Russian drones entering Polish airspace, heightened tensions in Europe. The escalating conflict in the Middle East, with Israel launching airstrikes on Qatar and the EU subsequently imposing sanctions on Israel, has exacerbated market uncertainty.
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Key Price Areas:
1: Key support below lies in the $3,650-3,662 range, Friday’s correction low, which coincides with the 50-period simple moving average on the 4-hour chart.
2: Stronger support lies in the $3,630-3,640 area, which represents a short-term bottom. Multiple lower shadows suggest bullish entry on falling prices.
3: If this area is broken, the next key support level lies around $3,600-3,610.
Resistance Level Analysis:
1: Immediate resistance above lies in the $3,685-3,700 range, particularly the psychologically important $3,700 level.
2: If this area is broken, gold could re-challenge its all-time high of $3,707 or even reach $3,730.
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In terms of trading volume, gold trading volume increases during rising prices and decreases during falling prices, a characteristic of bull markets.
However, recent trading volume near all-time highs suggests a lack of sustained buying momentum, suggesting the market may need some time to consolidate and digest.
Monday Forecast
1: Highest Probability Scenario (60% probability)
Gold prices are likely to continue their high-volume trading pattern next Monday, trading between $3,650 and $3,700.
The logic behind this trend is that the market needs more time to digest the impact of the Federal Reserve’s monetary policy while awaiting new data guidance.
Friday’s gold close around $3,685 suggests that bulls still have a significant advantage.
In this scenario, gold prices may first test the lower support level of $3,660-3,665. If this support level holds, a rebound to the $3,685-3,700 range is possible.
Monday’s Asian and European trading sessions are likely to be relatively quiet, while the US trading session could see significant volatility.
The trigger for this move could be further market interpretation of weekend speeches by Federal Reserve officials or expectations of geopolitical developments.
2: Low Probability Scenario (30% probability)
Gold prices break through the $3,700 resistance level and move upward to test the all-time high of $3,707, or even higher.
This scenario could be triggered by an unexpected escalation in geopolitical tensions over the weekend or by a market repricing of the Federal Reserve’s monetary policy path, reinforcing expectations of further rate cuts this year.
If gold prices can sustain above $3,700, it could trigger short-covering and new long entries, further pushing gold prices higher.
The next target would be around $3,730, or even higher.
This trend would require support from positive news, particularly a pullback from the US dollar index’s current highs.
3: Low Probability Scenario (10% Probability)
Gold prices fall below the $3,650 support level and test the key support level of $3,630-3,640.
This scenario could be triggered by a sustained strengthening US dollar, strong US economic data released before the market opens, or an unexpected easing of geopolitical risks, reducing safe-haven demand.
If gold prices fall below the $3,630-3,640 support area, they could fall further to the $3,600-3,610 range. However, the probability of this trend occurring is low, as the overall market environment remains favorable for gold, and the bullish trend remains unchanged.
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Trading Recommendations:
Trading Strategy: Generally, adopt a range-bound trading strategy. Consider establishing a position near support and reducing or taking profit near resistance.
Specifically, you can enter a long position in the 3655-3665 area, with a stop-loss below 3645 and a target between 3690-3700.
For aggressive traders, you can try a small short position in the 3685-3700 area, with a stop-loss above 3705 and a target between 3665-3675.
