In our previous analysis on Friday, September 20th, we noted that following the Federal Reserve's rate hike announcement, short-term bearish factors in the market had largely been exhausted. The pricing logic for gold has shifted from interest rate trading to credit and safe-haven trading, which supports a bottoming-out rebound in the metal's price. Technical indicators on the short-term charts also suggested further upside potential, leading us to advise that support levels to watch included $4,334 and then $4,310, while resistance was seen at $4,400, with a breakout potentially targeting $4,443.
Looking at the subsequent price action, during the European trading session last Friday, gold encountered resistance at the $4,400 round number and pulled back. After the US market opened, the metal continued to face downward pressure, finding a floor at $4,353. A rebound attempt stalled at $4,375, with prices then dipping to a support level of $4,342. From that point, gold mounted a recovery, reaching an intraday high of $4,396 in the US session, yet again hitting a barrier at the $4,400 level, before settling back to $4,375 into the close. Overall, gold traded broadly within the $4,334 to $4,400 range we had outlined, maintaining its consolidation pattern.
A senior analyst at Wolfinance Stars believes that last week's Fed rate hike of 25 basis points, its first of 2023, along with the dot plot indicating another potential hike this year, initially pressured gold to a one-month low. However, the metal rebounded consistently afterwards, wiping out the entirety of the day's earlier losses. The fact that gold rose rather than fell post-announcement is primarily because the market's underlying uncertainty was resolved once the Fed confirmed its decision. The shift in pricing logic from rate-focused trading to one driven by credit concerns and safe-haven demand has redirected attention towards longer-term factors such as US fiscal credibility, geopolitical tensions, and central bank reserve diversification. This pivot encouraged previously suppressed bullish positioning to re-enter the market, fueling the bounce. Over the medium to long term, continued accumulation by global central banks and recurring geopolitical risks are providing firm underlying support for gold prices.
On the daily chart, gold's rebound has established a new one-week high, displaying a relatively strong short-term tone. On the downside, support can be identified at $4,342, the level where prices stabilized after a pullback in Friday's US session, which coincides with the mid-band of the 4-hour Bollinger Bands and the 10-week moving average. Additional support lies at the $4,300 psychological level, near the weekly Bollinger Band midpoint. Turning to resistance, the $4,400 round figure remains key as it has capped multiple rebound attempts last week and aligns with the upper 4-hour Bollinger Band and the 5-week moving average. A decisive close above this level could open the door to further gains toward $4,443, a level that has blocked rallies earlier this month, and subsequently this month's high at $4,510. Momentum indicators are turning constructive: the 5-day moving average is curving upwards, hinting at a potential bullish crossover, the MACD histogram is also tilting higher, while the RSI and KDJ both show bullish configurations, although the RSI is slightly flattening. This suggests there is still room for additional upside in the near term.
For intraday trading, the primary narrative remains that post-Fed uncertainty has been removed, short-term selling pressure is waning, and combined with global central bank buying and ongoing geopolitical risks, the metal has a solid foundation for continued recovery. We recommend approaching the market with a range-bound strategy, focusing on support at $4,342 and $4,300, while monitoring the resistance at $4,400. Should prices convincingly break and hold above this level, the next targets would be $4,443 and $4,510.