【Daily Strategy】Probability of Interest Rate Cut Rises Again， Gold Rallies with Volatility

Gold: 

Since the start of this year, gold has surged by 48%, making it one of the best-performing assets. After a 4-month consolidation phase from April to August, gold resumed its upward trend, and its current price is approaching $3,900.

The most critical driver is the sustained erosion of the U.S. dollar’s credibility. Events such as the freezing of Russia’s foreign exchange reserves and Trump’s tariff policies have exacerbated this trend. On the other hand, after a 6-month pause in interest rate cuts, the Federal Reserve (Fed) has restarted rate cuts due to a weakening labor market. Investors’ bets on further rate cuts in the future continue to rise, and these multiple bullish factors have pushed up gold prices.

Owen, Senior Gold Analyst at Zhisheng Research invited by Plotio, stated that multiple bullish factors are driving gold prices higher, and the probability of a 25-basis-point rate cut by the end of this month has risen to nearly 100%.

Technical Outlook

Gold maintains a bullish trend on both weekly and monthly charts, with a high probability of further upside. On the hourly chart, gold has rallied with volatility over the past two days. Traders should watch the support level around $3,835 below, and in the intraday session, the first resistance level to focus on is the $3,891 high.

Gold Hourly Chart

Crude Oil: 

Starting from April, OPEC+ has accelerated its production increase, and the 2.2 million barrels per day (bpd) voluntary production cut implemented since November 2023 has been fully lifted. Data shows that OPEC+’s production hike will lead to a crude oil supply surplus of 1.7 million bpd this year. Additionally, U.S. shale oil production has risen to a record high of 13.5 million bpd this year.

The International Energy Agency (IEA) forecasts that global crude oil demand will only grow by 700,000 bpd this year, significantly lower than the 2.3 million bpd growth in 2023. Concerns about an oversupply of crude oil have intensified.

Earlier this year, Trump launched a tariff war, plunging the global economy into uncertainty and severely damaging crude oil demand. However, the European Union’s plan to fully ban Russian energy by 2027 is expected to reduce global supply by 500,000 to 1 million bpd. Meanwhile, the ongoing tension between the U.S. and Iran has alleviated the downward trend of oil prices to a certain extent.

Technical Outlook

Crude oil has recorded four consecutive bearish days on the daily chart, breaking below the key support level of $61.50 and returning to a downward trend. Considering the oscillating decline on the daily chart, traders should monitor whether the $58–$60 range can provide effective support below. In the intraday session, the $61.20 level serves as the key boundary between bullish and bearish sentiment.

Crude Oil Hourly Chart

Copper: 

After a sharp rally last week, copper has maintained a volatile upward trend on the hourly chart this week, with bulls dominating the market. From the hourly chart perspective, the probability of further upside is high. In the intraday session, traders can focus on the support level around $4.83 below.

Nikkei 225: 

After falling below the 45,200 level last week, the Nikkei 225 has fluctuated downward within a narrow range, representing a correction following the previous upward trend. The correction may have ended; if the index fails to break below 44,300, it is expected to resume its upward momentum. In the intraday session, traders should watch the support level around 44,550 below.

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