GCAP GOLD indicates that gold is consolidating, but maintaining an upward trend. The medium term remains positive.
GCAP GOLD assesses that the gold price has entered a consolidation period after reaching a new record high of $4,380 before falling more than $300 due to easing international political factors and the fragility of the US stock market due to credit problems in regional banks. It recommends "waiting for a dip to buy" at the support level of $4,070 - $4,000 if the gold price does not fall below $3,970. The medium-term trend remains positive.
22 Oct 68 Ms. Areerat Murachai, Chief Analyst, GCAP GOLD Gold prices fell more than 2 percent after hitting a new high of $4,380 before closing at around $4,250, mainly due to President Donald Trump's statements signaling an easing of tariffs on Chinese goods.
By stating that “Full tariffs on China may not be sustainable.” This has raised expectations for ministerial trade talks in Malaysia this week and leaders' talks in late October. This has temporarily eased trade tensions and put short-term pressure on gold prices.
Meanwhile, US stock markets are beginning to show signs of vulnerability in the financial sector, with reports that some regional banks, such as Zions Bancorp and Western Alliance Bancorp, suffered losses from fraudulent loans to real estate funds. This has raised concerns that the problem could spread to the broader credit system, leading some investors to dump financial stocks and turn to safe haven assets. This has helped gold remain a prominent safe haven asset.
Key factors to watch for next week
- US CPI inflation figures: The figures, which will be released on Friday, are a measure of inflationary pressures in the US economy. If the figures come out higher than expected, they could put short-term pressure on gold prices. However, if they come out lower than expected, they could increase expectations of a Federal Reserve (Fed) interest rate cut in October, which would be an immediate positive for gold.
- New round of US regional bank earnings: In particular, if East West Bancorp, Western Alliance and Zions' earnings fall short of expectations, it will undermine confidence in the financial sector and could be considered the beginning of a new recession in the US, supporting a new round of gold buying.
- Progress in US-China negotiations: If there are positive signals from the meeting between the US and Chinese leaders in late October, gold buying may decrease in the short term. However, if there is uncertainty or tensions, it will support gold prices to rise.
GCAP GOLD analysts recommend a "Buy on Dip" strategy. Consider buying when the price drops to test the support level of $4,070 - $4,000 (Thai gold price approximately 63,300 - 62,500 baht). Although the price is facing profit-taking after making a new high, gold is still in a consolidation phase within an uptrend structure and the medium-term trend remains positive.
A key watch point is the $3,970 level (approximately 61,500 baht in Thai gold). If the gold price falls below this level, it could indicate a deeper consolidation. Short-term profit targets are at the resistance levels of $4,200 and $4,300 (approximately 65,000 and 66,500 baht in Thai gold).
Related news:
- Today's gold price (October 22) opened at a decrease of 2,500 baht/baht of gold. Gold jewelry selling price is 64,550 baht/baht.
- Gold prices plummet to their lowest point in five years, with analysts predicting a potential consolidation due to high volatility.
