【Evening Session】Undiminished Investment Enthusiasm; Gold Remains the Top Choice

Gold:

Overnight, gold fluctuated slightly with significantly weakened selling pressure, and market sentiment has been partially repaired. Currently, the market has not given any signal of a peak in gold's long-term cycle, so investors should be cautious about claiming the end of the gold bull market.

From the perspective of capital flow, the capital inflows into European and American spot gold ETFs in August and September were the primary driving force behind the rise in gold prices. The net inflows into Asian ETFs did not show significant growth, reflecting that after the Fed's policy shift, European and American capital is accelerating to confirm that the magnitude of interest rate cuts may exceed expectations.

In terms of market demand, enthusiasm for gold remains high. Over the past four quarters, the total global gold demand has been approximately 1,220 tons, hitting the highest record in at least 14 years. The main buyers are central banks around the world, which also reflects the new trends in reserve assets among global central banks.

Peng Cheng, a market strategist at Zhisheng Research(exclusively invited by Plotio), believes that the foundation for gold's rise still exists. Expectations of interest rate cuts will lead to the long-term weakness of the U.S. dollar, from which gold will benefit. At the same time, the continuous weakening of the U.S. dollar's credit has forced central banks to increase their gold reserves to hedge risks. These factors determine the long-term trend of gold.

Technical Analysis：Gold closed with a medium negative candlestick on the daily chart, and the decline rate slowed down significantly. The 1-hour cycle shows lower highs and flat lows, making it highly likely to form a decline continuation pattern. In the short term, focus on the resistance around the $4,130 level.

Crude Oil:

Overnight, oil prices rebounded slightly, and the medium-term decline has been confirmed to stop. However, it can only be defined as a rebound for now, as fundamental pressures will limit the upside space of oil prices.

There is hope for a turnaround in the U.S. tariff war. After raising tariffs on China, Trump has also frequently shown goodwill to East Asia. Recently, the Chinese lead negotiator for China-U.S. economic and trade relations held a video call and agreed to hold a new round of China-U.S. economic and trade consultations as soon as possible. If substantial results are achieved in the short term, the impact on the global economy will be reduced, which is conducive to the recovery of the global economy.

From the perspective of inventory data, the decline in U.S. crude oil inventories may boost market sentiment in the short term. The U.S. EIA crude oil inventories for the week ending 17 October  fell by 961,000 barrels, compared with the market expectation of an increase of 1.205 million barrels, reversing the upward trend for three consecutive statistical cycles. However, there is great doubt about whether this trend can continue.

Technical Analysis：Crude oil closed with a medium positive candlestick on the daily chart, and the medium-term decline has stopped. However, it faces resistance from the previous low and the previous dense trading area, with significant upward resistance. The $60.70 level is the bull-bear dividing line in the short term. If it breaks above this level, it may further test the $64 level; if not, it is likely to test the support around the $58.10 level.

U.S. Dollar Index :

Overnight, the U.S. Dollar Index rebounded slightly but showed extreme weakness, with the bullish side clearly at a disadvantage. The U.S. government shutdown and expectations of Fed interest rate cuts will suppress the U.S. Dollar Index.

Recently, U.S. President Trump rejected the request for a meeting proposed by Democratic congressional leaders, stating that it would only happen if the government shutdown ends. The government shutdown has increased its impact on the U.S. economy, which will lead to a slight and temporary rise in the unemployment rate. When the government resumes operations, the unemployment rate may rise to 4.3%.

This deadlock has complicated the task facing the Federal Reserve at its meeting on October 29, possibly shifting the Fed from "preventive rate cuts" to "recessionary rate cuts". A Reuters survey of economists shows that the Fed will cut its key interest rate by 25 basis points next week and cut it again in December.

Technical Analysis：The U.S. Dollar Index closed with a small positive candlestick on the daily chart, but the upward movement was obviously blocked, with significant resistance from the previous high, and it may form a decline continuation pattern. The 1-hour cycle shows higher highs and higher lows, which may form an uptrend continuation pattern. There is a high probability of further highs during the day; focus on the resistance around the 99.20 level.

Nikkei 225:

The Nikkei 225 formed a "Evening Star" candlestick pattern on the daily chart, indicating that a medium-term correction may begin. The upward structure of the 4-hour cycle has been completed, and a short-term ABC decline may form. There is a high probability of further lows during the day; focus on the resistance around the 49,460 level.

Copper:

Copper has closed with small negative and positive candlesticks consecutively on the daily chart, but the price center of gravity does not move down, with obvious support from long-term moving averages, and it may form an uptrend continuation pattern. The 4-hour cycle shows converging highs and lows, which may form a symmetrical triangle. During the day, focus on the support around the $4.9 level.

23 October Market Snapshot：

1.The Trump administration has expanded its intervention. The White House is negotiating to provide federal funds to multiple quantum computing companies by acquiring equity stakes.

2.The Federal Reserve has presented an outline of a revised plan to other U.S. regulatory agencies, which will significantly relax the capital requirements imposed on Wall Street's largest banks during the Biden era.

3.After the U.S. imposed sanctions on Russian oil giants Rosneft and Lukoil, Russia's oil supply to major Indian refiners is expected to drop to near zero.

23 October Key Data/Events Preview：

1.22:00 (GMT+8): The preliminary reading of the Eurozone Consumer Confidence Index for October will be released, with a market expectation of -15.

2.22:00 (GMT+8): U.S. Existing Home Sales (Annualized) for September will be released, with a market expectation of 4.06 million units.

3.22:30 (GMT+8): U.S. EIA Natural Gas Inventories for the week ending 17 October  will be released, with a market expectation of an increase of 81 billion cubic feet.

[Important Disclaimer:The above content and views are provided by Zhisheng, a third-party cooperative platform, for reference only and do not constitute any investment advice. Investors who trade based on this information shall bear their own risks.]

In the event of any inconsistency between the English and Chinese versions, the Chinese version will prevail.This article is from Plotio. Please indicate the source when reprinting.