FxStreet reports — On Wednesday in Asian trading, the U.S. dollar index declined to 101.3, while U.S. Treasury yields also weakened slightly, providing support for gold prices; spot gold traded sideways around 3950, entering a consolidation phase. Central bank gold purchases offer medium- to long-term support; institutions believe the prior decline was overdone, but interest rate expectations and the outcome of the U.S. midterm elections remain short-term variables, leaving gold price directionally range-bound amid ongoing bullish and bearish pressures.
According to Huitong Finance APP — during Asian trading on Wednesday, the USD index retreated from its highs to 101.3, as the dollar's previous pressure on gold prices eased, and U.S. Treasury yields also declined slightly, reducing the carrying cost burden on interest-free assets like gold. Spot gold oscillated repeatedly around 3950, primarily consolidating to form a bottom. Market focus remains on the outcome of the U.S. midterm elections, which will help determine the future trajectory of fiscal and debt policies, directly impacting USD volatility.
Market sentiment suggests that if the Democrats control both chambers of Congress, policy implementation may become more difficult, potentially pressuring the dollar and benefiting gold; if divided government emerges, fiscal constraints may ease, strengthening the dollar. According to the latest data from the World Gold Council, global central banks net purchased 321 tons of gold in the third quarter, marking the fastest purchasing pace since the end of 2024, with physical demand providing a floor of support; however, the Council has lowered its full-year forecast for gold investment demand growth, reflecting weaker speculative interest.
Commerzbank noted that gold prices previously plunged 3.7% in a single day and posted a monthly decline of nearly 7% in October, largely pricing in the Fed's Federal Reserve December rate hike expectations. However, after the Fed held rates steady last week, long-term yields have declined, suggesting this sell-off may have been overdone—the fundamental long-term bullish case remains intact. While a weaker dollar provides some support, market pricing for future rate hikes has not fully dissipated, and bullish sentiment remains cautious. As a result, gold has yet to gain sustained upward momentum and is primarily consolidating within a range.
On the daily chart, gold prices are in a consolidation phase forming a bottom, trading below both the 100-day moving average and the Bollinger Middle Band. The medium-term trend remains weak, but downward momentum has clearly weakened. The RSI is holding around 36, near the oversold zone, indicating that selling pressure is easing and buying support is gradually emerging at lower levels, highlighting clear bottom-formation characteristics. The first resistance above is the Bollinger Middle Band at 4080, with strong resistance at the 100-day moving average of 4205. The key support below is the Bollinger Lower Band at 3900, which serves as the critical defensive line for this bottoming process. If 3900 holds, the price will remain in a range-bound consolidation; however, a decisive break below it would signal bottom failure and renewed bearish momentum. On the 4-hour chart, candlesticks are converging and moving averages are intertwined, with the trading range narrowing as bullish and bearish forces approach equilibrium—a classic bottom consolidation pattern. Short-term price volatility has decreased; the recent modest recovery driven by a weaker dollar is insufficient to break above upper resistance. Short-term resistance is at 3970, and short-term support is at 3900. Until a clear breakout occurs, maintain the bottom-formation assessment and wait for fundamental signals to confirm the validity of the bottom.
Editor's Summary
The dollar has pulled back, easing short-term headwinds, while continued central bank gold purchases have pushed gold into a consolidation and base-building phase. However, the base has not yet been fully formed, so a reversal cannot be confirmed prematurely. The core market tension right now lies in the offset between upward pressure from加息 expectations and dollar uncertainty driven by elections, versus support from prior overselling and physical buying by central banks. In the short term, treat the market with a range-bound approach: monitor the strength of the 3900 support level, and watch closely whether the 4080 resistance can be held. Until a clear breakout occurs, avoid overly aggressive positions; focus on tracking the U.S. midterm elections, U.S. Treasury yields, and the dollar’s next moves, and remain cautious of rapid breakouts triggered by news events.
Market sentiment suggests that if the Democrats control both chambers of Congress, policy implementation may become more difficult, potentially pressuring the dollar and benefiting gold; if divided government emerges, fiscal constraints may ease, strengthening the dollar. According to the latest data from the World Gold Council, global central banks net purchased 321 tons of gold in the third quarter, marking the fastest purchasing pace since the end of 2024, with physical demand providing a floor of support; however, the Council has lowered its full-year forecast for gold investment demand growth, reflecting weaker speculative interest.
Commerzbank noted that gold prices previously plunged 3.7% in a single day and posted a monthly decline of nearly 7% in October, largely pricing in the Fed's Federal Reserve December rate hike expectations. However, after the Fed held rates steady last week, long-term yields have declined, suggesting this sell-off may have been overdone—the fundamental long-term bullish case remains intact. While a weaker dollar provides some support, market pricing for future rate hikes has not fully dissipated, and bullish sentiment remains cautious. As a result, gold has yet to gain sustained upward momentum and is primarily consolidating within a range.
On the daily chart, gold prices are in a consolidation phase forming a bottom, trading below both the 100-day moving average and the Bollinger Middle Band. The medium-term trend remains weak, but downward momentum has clearly weakened. The RSI is holding around 36, near the oversold zone, indicating that selling pressure is easing and buying support is gradually emerging at lower levels, highlighting clear bottom-formation characteristics. The first resistance above is the Bollinger Middle Band at 4080, with strong resistance at the 100-day moving average of 4205. The key support below is the Bollinger Lower Band at 3900, which serves as the critical defensive line for this bottoming process. If 3900 holds, the price will remain in a range-bound consolidation; however, a decisive break below it would signal bottom failure and renewed bearish momentum. On the 4-hour chart, candlesticks are converging and moving averages are intertwined, with the trading range narrowing as bullish and bearish forces approach equilibrium—a classic bottom consolidation pattern. Short-term price volatility has decreased; the recent modest recovery driven by a weaker dollar is insufficient to break above upper resistance. Short-term resistance is at 3970, and short-term support is at 3900. Until a clear breakout occurs, maintain the bottom-formation assessment and wait for fundamental signals to confirm the validity of the bottom.
Editor's Summary
The dollar has pulled back, easing short-term headwinds, while continued central bank gold purchases have pushed gold into a consolidation and base-building phase. However, the base has not yet been fully formed, so a reversal cannot be confirmed prematurely. The core market tension right now lies in the offset between upward pressure from加息 expectations and dollar uncertainty driven by elections, versus support from prior overselling and physical buying by central banks. In the short term, treat the market with a range-bound approach: monitor the strength of the 3900 support level, and watch closely whether the 4080 resistance can be held. Until a clear breakout occurs, avoid overly aggressive positions; focus on tracking the U.S. midterm elections, U.S. Treasury yields, and the dollar’s next moves, and remain cautious of rapid breakouts triggered by news events.