Gold’s Stability Amid Geopolitical Tensions High-level trade talks between the US and China are about to start, with some US export restrictions being discussed. The US has imposed new sanctions on Russia, focusing on major energy companies to lower Moscow’s oil income. These sanctions come after a summit between US President Donald Trump and Russian President Vladimir Putin was called off. Currently, gold is trading in a narrow range of $4,000 to $4,150, waiting for new developments, like the US CPI report, to guide its next move. The $4,000 level is a key support point, while $4,150 acts as immediate resistance. Even with a bearish outlook, active buying at lower levels suggests we might see a longer period of consolidation. Gold remains steady in a tight range around $4,150 as the market anticipates the upcoming US CPI inflation report, which is expected tomorrow. This report will significantly influence the Federal Reserve’s future actions and will be essential in determining gold’s next move. Currently, the market reflects a strong chance of a rate cut at next week’s FOMC meeting. Data from the CME FedWatch Tool shows a 75% likelihood of a 25-basis-point cut, but a higher-than-expected CPI could change those expectations quickly. We must brace for a rapid adjustment if inflation exceeds the predicted 3.8%. Lessons From 2023 This situation feels similar to the uncertainty we faced back in 2023, when high inflation clashed with geopolitical tensions. At that time, the Fed’s aggressive rate hikes limited gold’s gains, despite the ongoing conflict in Ukraine. It reminds us that central bank policies can significantly affect the market, even during risk-off periods. Geopolitical tensions are providing strong support for gold prices, preventing major sell-offs. The US-China trade talks starting in Malaysia are crucial, especially since there are potential new US export controls on sensitive tech like AI chips. Any negative news from these talks could lead investors to flock to safe-haven assets like gold. Additionally, the new US sanctions on Russian energy companies have already shaken up the commodity markets. We recently saw WTI crude oil futures rise over 4% this week, settling above $92 a barrel, which could heighten inflation fears and further boost gold. Former Russian President Medvedev’s sharp rhetoric highlights the increased risk of further escalation. For derivative traders, the pre-CPI atmosphere suggests focusing on volatility rather than direction. Buying straddles or strangles with expirations in early November may be a smart move to prepare for a significant price swing following the data release. This approach benefits from a breakout without needing to guess its direction. Futures traders should proceed with caution in the current $4,000 to $4,150 range. A decisive close above the $4,200 resistance level would confirm bullish momentum, while a drop below the psychological $4,000 support could indicate a deeper correction. Until one of these levels is broken, it’s wiser to scalp within the range with tight stops. Create your live VT Markets account and start trading now.

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