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Does the Bearish Trend End?
Commodity
Summary:
Last week, the U.S. government resumed operations after a shutdown, which led to a significant decline in gold prices. In the short term, market sentiment is leaning toward a downward trend.
Sell
PENDINGXAUUSD
EXP
4112.00
Entry Price
3950.00
TP
4155.00
SL
4018.18 -27.30 -0.67%
--
Point
PENDING
3950.00
TP
CLOSING
4112.00
Entry Price
4155.00
SL
Fundamentals
Last week, the U.S. Congress made progress on a temporary funding bill, and the government reopening was confirmed. These moves directly reduced political uncertainty and restored the flow of macroeconomic data and fiscal spending expectations that had been disrupted. As a result, the market generally became optimistic about a rapid "return to normal" for the economy, which in the short term drove a rebound in risk assets.
For gold, the end of the shutdown has two intertwined transmission channels: 1. Increased certainty leads to a recovery in risk appetite, reducing the demand for safe-haven assets and thereby putting downward pressure on gold prices. 2. If the resumption of data releases and expectations of fiscal stimulus boost economic and inflation expectations, nominal interest rates will be boosted, which will further weigh on gold prices by raising real/nominal yields. Both of these channels tend to exert downward pressure on gold prices, but the short-term direction is still determined by the immediate reaction of yields and the U.S. dollar.
In reality, the market showed volatility around the shutdown news: when there was hope for an "end to the shutdown," gold prices briefly rose (a mix of safe-haven and rate-cut expectations). Then, gold gave back gains or declined due to strengthening interest rates, a stronger dollar, or risk reassessment. This suggests that short-term buying and selling momentum, as well as volume and capital flows, are key determinants of the outcome.
Technical Analysis
According to the daily chart, gold prices rebounded last Thursday to near the resistance level of $4230 but then pulled back under pressure. On Friday, driven by the negative impact of the government reopening, prices dropped nearly $200 from the day's high. Currently, they have found temporary support around $4040, and there is a short-term technical need for a corrective rebound.
In terms of technical indicators, the current price is still in the upper half of the Bollinger Bands, suggesting a potential short-term rebound. In the 4H chart, the RSI stays around 40, indicating that market sentiment remains bearish and the room for a rebound may be limited.
At present, the key short-term resistance levels for gold are at $4116–$4150, while the first major support zone lies at $4030–$4000. If the price rebounds to the resistance zone but fails to break through and turns weaker, it may continue to decline in the short term, testing the $4000 level. Conversely, if it strongly breaks above $4150, the upward space for gold will open up, with potential to test the $4245 level.
Trading Recommendations
Trading direction: Sell
Entry price: 4112.00
Target price: 3950.00
Stop loss: 4155.00
Valid Until: December 01, 2025, 23:00:00
Support: 4032.23/4000.00
Resistance: 4116.00/4150.00
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