GDFS TRADE Gold Analysis, October 28, 2026
Previous Day’s Review:
Gold prices initially declined before rebounding yesterday. In early Asian and European trading, prices fell to 3,988.6, dragged down by a rebounding US dollar to a two-week high. Later, at 20:30, the release of September durable goods orders showed a 1.8% month-on-month increase, the largest increase in five months. At 22:00, the release of the October consumer confidence index showed a rise to 91.7, far exceeding the expected 81 and the previous value of 84.2. Despite the seemingly strong data, gold prices rose instead of falling after the data release, surging to 4,065.7 in the New York session. Spot gold closed at 4,060.1, up 1.1% on the day, while the December gold futures contract in New York closed 1.04% higher at 4,073.1. The market’s interpretation of the data is due to several factors. The rebound in consumer confidence was primarily driven by falling gasoline prices. The 12-month inflation expectations surveyed also declined, and the data, which surveyed up to October 21st, is a lagging indicator. The dollar weakened after the data release, coupled with short covering at a three-week low and bargain hunting, pushing prices to recover for the second consecutive day. Prices retreated slightly during the Asian session this morning, currently trading at 4,046.
Today’s Analysis:
The current market is in a technical correction phase after a breakdown. Gold prices have rebounded for two consecutive days from a low of 3,975, recovering to 4,060. This represents short covering and bargain hunting after a sharp drop, but the downward trend in medium-term highs and lows has not yet reversed, and the rebound is entering a key retracement resistance zone. Today is the first day of the Fed’s interest rate decision; there are no major data releases, and the market could see three possible scenarios. The baseline scenario is sideways consolidation between 4,030 and 4,070, with funds reducing bets before the 2:00 AM decision, and both long and short positions primarily focused on short-term trading within this range. If buying continues throughout the day and the price breaks through 4,066 to 4,073, it will test the 4,083 to 4,100 retracement resistance zone, which represents the 0.618 Fibonacci retracement level of this round of decline and a previous area of concentrated breakdown. Conversely, if the rebound is resisted at 4,060 to 4,070 and falls below 4,030, it will return to 4,015 to 4,020, and then test 3,988 to 3,990. Overall, the market is expected to consolidate before the interest rate decision, with a low probability of a one-sided breakout; the decision at midnight will be the real window for directional selection.
Fundamentals:
The Federal Reserve is now in its policy meeting phase, with no official speeches during the quiet period. The market consensus is that rates will remain unchanged this week, with the focus entirely on the statement, dot plot, and press conference hints at December action. Currently, federal funds rate futures indicate an 80% probability of a December rate hike, while the probability of a rate hike this week is only about 10%. Regarding oil prices, Brent crude has retreated from a six-month high of $116.72 and is consolidating around $110. News of the US-Russia-Ukraine trilateral talks has eased geopolitical premiums, but Houthi attacks on Saudi Arabia continue, and supply risks in the Middle East remain. Oil price movements will directly impact inflation and interest rate expectations. Yesterday’s strong durable goods orders and consumer confidence theoretically support maintaining higher interest rates for longer, but the market chose to focus on declining inflation expectations in surveys and consumer spending cuts, reflecting a tendency for funds to close positions and take profits at three-week lows rather than shorting. No data is available today. Market movements will primarily follow the fluctuations of the US dollar, US Treasury yields, and oil prices. Significant volatility is expected around 2:00 AM. The preliminary GDP figures and PCE price data released at 8:30 PM on Thursday will, along with the interest rate decision, set the tone for the market outlook.
Technical Analysis:
From a macro perspective, the downward channel formed after the February peak at 5,400, with both highs and lows moving lower, remains intact. Last week’s break below 4,000 confirmed a breakdown of the July-October trading range. The medium-term bearish trend remains unchanged. A reversal requires at least a recovery above 4,100-4,120, followed by a target of 4,226. In the short term, a double bottom formed between 3,975 and 3,988. After two consecutive days of rebound, the price entered the retracement resistance zone of 4,060 to 4,083, which is the 0.5 to 0.618 Fibonacci retracement level of this round of decline. 4,073 is the settlement high for gold futures, with stronger resistance at 4,100 to 4,120. Support levels to watch are first at 4,030 to 4,035, the intermediate position of the overnight rally, followed by 4,015 to 4,020, then 3,988 to 3,990 and 3,975. A break below these levels would target 3,943 to 3,950. The current price of 4,046 is in the middle of the range. Short-term momentum has turned sideways after the continuous rise, with no clear reversal or acceleration structure visible.
Trading Strategy:
For intraday high-probability setups, focus on light positions within a range. Short positions can be initiated after a rebound to the 4,060-4,073 resistance zone, followed by a long upper shadow, secondary resistance, or high-volume stagnation. The initial target is 4,035, with further targets at 4,020-4,015, and a follow-up move to 3,990 if the price breaks below this level. Long positions can be initiated with light positions when a clear bottoming and stabilization structure appears at the 4,030-4,035 or even deeper 4,015-4,020 area, targeting 4,055-4,065, with profit-taking upon reaching the target. The current price of 4,046 is in the middle of the range, offering a neutral risk-reward ratio; hasty entry is not advisable. If the price effectively recovers and holds above 4,073, the short-selling strategy is immediately invalidated; instead, wait and see if it retraces to 4,083 to 4,100. If it breaks directly below 4,030, then follow the trend and go short; no longer go long against the trend. Before the 2:00 AM decision, all positions should be held with light positions; do not hold heavy positions after the decision. After the announcement, wait for a retracement confirmation; do not chase the first sharp move.
Important Notes and Data Releases Affecting the Gold Market This Week (GMT+8)
Today, October 28th, is the first day of the Fed’s interest rate decision; there are no major data releases. At 2:00 AM on October 29th, the Federal Open Market Committee (FOMC) will release its interest rate decision and policy statement. At 2:30 AM, Chairman Warsh will hold a press conference. At 8:30 PM that evening, the preliminary Q3 GDP, personal income and PCE price deflator, and the latest weekly initial jobless claims will be released. The Q3 Employment Cost Index will be released at 20:30 on October 30th, and the European Central Bank and the Bank of Japan will also announce their policy decisions later this week. Liquidity tightens and spreads widen before and after the decisions, making the 4,000-4,100 range prone to false breakouts. Key levels need confirmation from the closing price structure. It is not advisable to hold heavy positions overnight before 2:00 AM. The GDP and PCE data will follow the interest rate decision on Thursday night, potentially leading to two consecutive days of significant market volatility. Strict position control is essential.
Summary:
Gold is currently trading at 4,046. Despite strong durable goods orders and consumer confidence data yesterday, gold rebounded to close at 4,060, mainly due to declining inflation expectations, a weaker dollar, and short covering – a technical correction after a breakout. Today, the first day after the interest rate decision, the market is expected to consolidate sideways between 4,030 and 4,070. The true direction will depend on the policy decision at 2:00 AM and the GDP and PCE data on Thursday night. In terms of strategy, short positions should be opened when resistance is encountered between 4,060 and 4,073, and long positions should be opened when stabilization occurs between 4,030 and 4,035. No positions should be opened in the middle range. Positions should be reduced before the decision is made. Do not bet on one side. Strictly adhere to the profit/loss ratio and position discipline.