Article by: ETO Markets

From a fundamental perspective, gold prices fell at the start of the week, mainly due to the continued strength of the US dollar and the further rise in US Treasury yields. Behind this is the market's expectation that the Federal Reserve may implement a small interest rate cut, as well as a new round of concerns about the possibility of an increase in the US fiscal deficit. Nevertheless, the downward pressure on gold is supported by the safe-haven demand brought about by the tension in the Middle East and the uncertainty before the US presidential election. At the same time, important US economic data to be released this week, including the third quarter GDP report, the core PCE price index and non-farm payrolls data, also made the market cautious, making the fluctuation of gold prices relatively limited.

From a technical perspective, gold prices have failed to break through the resistance of the $…-$… area in the past week, showing the weakness of bullish forces and uncertainty in the market direction. In the short term, if gold prices continue to fail to break through the above resistance, it may trigger a further correction, with the support below in the $…-$… area. If this support level is broken, gold may accelerate the correction to $… and even test the $… and $…-$… levels. However, if gold breaks out and sustains above $…, it is expected to retest the historical high and may further move towards the $… and $… levels. Investors should wait for clear technical signals to confirm the recent trend direction before entering a trade.