In the early hours of November 1st in the Asian market, spot gold oscillated within a narrow range, trading near $2,746.27 per ounce. On Thursday, gold prices fell back from their historic highs, closing down 1.56% at $2,743.80 per ounce, forming a "bearish engulfing" top signal, marking the largest single-day drop since July 19th. The gold price pullback was mainly influenced by the latest U.S. economic data. The data showed a strong performance in initial jobless claims, diminishing market expectations for a Federal Reserve rate cut. Meanwhile, ceasefire talks between Israel and Lebanon's Hezbollah made good progress, easing market safe-haven sentiment. Some bulls took profits before the non-farm data and the U.S. election, which also accelerated the gold price correction.
Nonetheless, gold prices still rose by 4.15% in October, marking the fourth consecutive month of gains. It's worth noting that despite several "engulfing" bearish signals in recent months, gold prices continued to climb, repeatedly hitting record highs, indicating the possibility of high-level oscillation still exists. Investors should pay attention to major events next week, including Tuesday's U.S. election and Wednesday's Federal Reserve meeting. With increased market volatility, it is not surprising that some traders choose to take profits.
The U.S. non-farm employment data will be released on Friday evening, the last important economic indicator before the election. Economists expect U.S. non-farm employment to increase by 113,000 in October, with the unemployment rate remaining at 4.1%. Analysts believe the Federal Reserve may cut interest rates by 25 basis points next Thursday, which would support non-yielding asset gold in the medium to long term. Additionally, the U.S. September personal consumption expenditures (PCE) price index rose by 0.2%, in line with expectations, and is a core inflation indicator currently monitored by the Federal Reserve.
On the geopolitical front, the market remains highly focused on the Middle East situation. It is reported that U.S. Secretary of State Blinken recently stated that Israel and Lebanon's Hezbollah made "good progress" in their ceasefire talks, but tensions between Israel and Iran continue to escalate. Reports indicate that Iran is preparing to launch retaliatory strikes on Israel from within Iraq in the coming days, and this uncertainty continues to sustain market safe-haven sentiment.
Notably, this Sunday (November 3rd), North America will enter Daylight Saving Time, delaying the market trading hours and economic data release times by one hour in the U.S. and Canada. Investors need to plan their trades according to the adjusted schedule.
