Gold Breaks Below $1885 Support Level, Bearish Signals Emerge, Short-Term Outlook Bearish

In recent days, gold has experienced several fluctuations in the short-term, ultimately failing to sustain a rebound and continuing its accelerated decline. This follows the Federal Reserve's hawkish signal of pausing interest rate hikes during the policy meeting.

Of course, factors contributing to the recent sharp drop in gold include the risk of a U.S. government shutdown, surging international oil prices, pressure on U.S. stock market financing due to long-term high interest rate expectations, a strong U.S. dollar, and better-than-expected U.S. durable goods orders in August.

Yesterday (September 27th), the U.S. Department of Commerce reported a significant increase in U.S. durable goods orders for August, far exceeding expectations. The data showed a month-on-month growth of 0.2% in U.S. durable goods orders, surpassing the expected decline of 0.5%. Excluding defense capital goods orders and aircraft, core orders increased by 0.9% month-on-month, in line with market expectations. Military aircraft orders grew by nearly 19%. After excluding volatile transportation-related durable goods orders, the initial estimate showed a 0.4% increase month-on-month, surpassing the expected 0.2%.

Analysts believe that the unexpected 0.9% increase in U.S. core orders for August may indicate an impending end to the manufacturing industry recession.

In reality, with expectations of persistently high interest rates and another rate hike in the near future, the U.S. dollar has gained strong support. The yield on 10-year U.S. Treasury bonds has exceeded 4.5%, coupled with the recent upward trend in oil prices and positive economic data. Market expectations of stubborn U.S. inflation have intensified, putting significant downward pressure on gold. It is expected that gold may struggle to successfully rebound in the short-term and continue its downward trend.

Market analysts suggest that this bearish momentum may push gold prices down to around $1810, approaching the low point of 2023.

From a technical perspective, gold continues its downward trend since reaching its highest point in May this year. Multiple attempted rebounds have proven futile. On the daily chart, gold has once again fallen below the 200-day moving average and is trading below it. The bearish signal is evident, leading to the recommendation of short positions on rallies in the near term.

Source：Mitrade Webtrader