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Gold Prices Have Fallen Below the Psychological Threshold of US$4,000, and a Short-term Rebound May Prove Difficult to Sustain
Commodity
Summary:
The outlook for Federal Reserve rate cuts remains uncertain amid a data vacuum, with international gold prices continuing their downward trend. Federal Reserve Governor Waller supports adopting a gradual approach to rate reductions.
Sell
TradingXAUUSD
EXP
4034.09
Entry Price
3868.00
TP
4098.00
SL
4073.76 +6.37 +0.16%
0
Point
Flat
3868.00
TP
CLOSING
4034.09
Entry Price
4098.00
SL
Fundamentals
Gold prices extended their three-day decline as market expectations for a U.S. rate cut next month gradually faded. During European trading hours on Tuesday, gold prices fell below the psychological threshold of US$4,000.
Following the longest government shutdown in U.S. history, traders and policymakers are awaiting a flood of economic data.
Meanwhile, several Federal Reserve officials warned that borrowing costs would not be lowered again; however, Federal Reserve Governor Christopher Waller struck a notably dovish tone in his remarks last night, arguing that inflation risks had diminished and that weak labor market conditions now warranted greater attention.
Waller stated that he “is not concerned about accelerating inflation,” adding that this week's September jobs report or any upcoming data releases are unlikely to alter his view that “another rate cut is needed” following months of cooling employment figures. He cautioned that tight monetary policy imposes disproportionate pressure on low- and middle-income consumers, further reinforcing the necessity for accommodative measures.
Waller stated that the December rate cut would provide “additional insurance” against further deterioration in the labor market and help bring policy closer to neutral levels.
Additionally, Vice Chairman Philip Jefferson presented a more balanced perspective in his remarks, acknowledging that policy has been moving toward the neutral rate. He added, “The shifting balance of risks underscores the need for caution as we approach the neutral rate.”
Technical Analysis
The real yield on 10-year U.S. Treasuries has risen, breaking above 1.77% and holding support, increasing the opportunity cost of holding gold and limiting its upward momentum.
In the short term, gold prices face the risk of further declines, with key resistance at US$4,052. Should this resistance continue to cap bullish momentum, it could trigger a downward move toward the US$3,929-US$3,868 range.
Although the price experienced a dead cat bounce after falling below the US$4,000 threshold intraday, the short-term rebound is not expected to continue. It is recommended to go short at the highs.
Trading Recommendations
Trading Direction: Sell
Entry Price: 4052
Target Price: 3868
Stop Loss: 4098
Valid Until: December 3, 2025 23:55:00
Support: 4025, 3998, 3928
Resistance: 4052, 4064, 4082
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