Core Viewpoint - The article discusses the recent fluctuations in gold prices, driven by expectations of interest rate cuts by the Federal Reserve and signs of economic weakness in the U.S. [2][3] Fundamental Analysis - **Federal Reserve Rate Cut Expectations**: - Fed Chair Powell indicated a weak labor market, leading to a decline in the dollar index and increasing gold's attractiveness [2] - Traders anticipate a 25 basis point rate cut at the Fed's meeting at the end of October, with a 100% probability of another cut in December, enhancing gold's appeal in a low-interest environment [2] - The Fed's Beige Book reported minimal changes in economic activity, with rising layoffs and reduced spending among middle and low-income households [2] - Boston Fed President Collins and Governor Milan support two more rate cuts this year, which would lower U.S. Treasury yields and indirectly boost gold's appeal [2] - **Signs of Economic Weakness in the U.S.**: - The U.S. government shutdown has lasted 15 days, causing an estimated $15 billion daily loss in economic output, affecting key data releases [2] - Despite a better-than-expected New York Fed Empire Manufacturing Index, the Beige Book noted cooling consumer spending and rising layoffs, with tariffs increasing input costs and inflation expectations [2] - Consumption patterns are diverging, with high-income households increasing spending while middle-income families face "middle-class recession" [2] - **International Trade and Geopolitical Tensions**: - President Trump is considering ending some trade relations with China, with U.S. Treasury Secretary Mnuchin and Trade Representative Lighthizer criticizing China's export controls on rare earths [3] - China's Ministry of Commerce responded, stating that U.S. restrictions harm Chinese interests, contributing to a decline in the dollar index to 98.65, providing upward momentum for gold [3] - Increased geopolitical tensions are driving demand for gold as a hedge against stock market risks, with a global trend towards de-dollarization enhancing gold's safe-haven role [3] Technical Analysis - **Daily Level**: - Gold continues a strong upward trend, closing with a bullish candle and achieving a "four consecutive bullish days" pattern, solidifying a bullish market structure [7] - The price has not broken below the 5-day and 10-day moving averages, indicating that any short-term declines should be viewed as technical corrections rather than trend reversals [7] - **Four-Hour Level**: - Gold shows a strong upward movement, consistently supported by the MA5 and MA10 moving averages [10] - The MA10 serves as a critical support level; a drop below this average would signal a potential adjustment phase, while stability above it suggests continued bullish momentum [10]