On Friday (October 31) in early Asian trading, spot gold traded around $4028.50 per ounce. Gold prices rose nearly 2.4% on Thursday, benefiting from the Federal Reserve's latest interest rate cut, which enhanced gold's appeal. However, doubts remained about the actual effectiveness of the newly reached trade agreement.

Although gold showed signs of weakness during the session, initial optimism about an end to the trade war quickly faded as the market scrutinized the details of the trade negotiations, providing support for gold prices. In a low-interest-rate environment and with economic uncertainty, gold, which does not generate interest, typically offers greater investment value.

From a daily chart perspective, while the Fed's rate cut should theoretically be beneficial for gold prices, profit-taking and a hawkish tone from the meeting prevented gold from successfully holding above the $4000 mark, ultimately hovering below recent levels again. Currently, the short-term moving averages are accelerating downwards, exerting downward pressure, and the MACD indicator is also in a bearish crossover state. Therefore, a continued downward trend in the short term cannot be ruled out.

Looking at the 4-hour chart for spot gold, the previous head-and-shoulders pattern has broken below the neckline support, opening up significant downside potential. A clear short-term downtrend has formed, with sellers holding a significant advantage. The moving averages are currently in a bearish alignment, and the MACD indicator has formed a bullish crossover below the zero line, suggesting limited room for further correction. Therefore, the recommended strategy for now is to sell on rallies. Resistance: 4010-4020-4030; Support: 3995-3980-3970.

Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.