●FPG’s latest market dehydration news:
1. As tensions in the Sino-US trade war eased and risk appetite improved, gold prices fell below $4,000 per ounce for the first time since mid-October on Monday, hitting a daily low of $3,971 per ounce.
2. On Sunday, the Chinese and US economic and trade teams concluded two days of consultations in Kuala Lumpur, the capital of Malaysia. After the talks, U.S. Treasury Secretary Bessent said in an interview with U.S. media that after two days of talks in Kuala Lumpur, the two sides reached a “very substantial framework agreement” and the U.S. would “no longer consider” imposing 100% tariffs on China.
3. The market believes that the probability of the Federal Reserve cutting interest rates by 25 basis points this week is as high as 97%. Gold itself does not earn interest and generally performs well in low interest rate environments.
●FPG fortune prime global analyst opinion:
FPG special analyst (Felix) opinion:
In addition to the technical selling, gold has fallen further as trade tensions have faded, a factor that drove gold prices from $3,800 an ounce to $4,400 an ounce in the first three weeks of October. The Relative Strength Index (RSI) remains bullish and is about to turn bearish. Gold prices may consolidate within the range of $3,900-4,000 per ounce in the short term. During two days of talks in Malaysia, China and the United States reached preliminary consensus on issues such as export controls, fentanyl and shipping taxes. The market has regained optimism about the Sino-US trade agreement, which may be the reason for the latest decline in gold prices.
FPG special analyst (chad) opinion:
With gold closing below $4,000 an ounce on a daily basis, bears may target the October 9 low of $3,944 an ounce. A break below the latter would see gold target the October low of $3,899 an ounce before testing the 50-day simple moving average (SMA) of $3,767 an ounce. On the other hand, it added that if gold rebounds above $4,000/oz and remains above that level, the next level of resistance will be the $4,100/oz mark, followed by the October 22 high of $4,161/oz.
