Gold market analysis

"Gold Price Forms Narrowing Triangle in Short Term" 11/9/2025 9:08 Completed 

The upward trend of gold prices reaching new highs came to an end yesterday. Although the spot gold price dropped to $3,620.9 in the early Asian session and then continued to rise, reaching a high of $3,657.5 in the London midday session before fluctuating and falling, it did not resume its upward trend as it had in the past period or even reach a new high in New York. Instead, it plunged sharply after the release of the US August PPI data showing a slower year-on-year increase. The data indicated that the overall US PPI rose by 2.6% year-on-year in August, down from 3.1% in July, while the core PPI rose by 2.8% year-on-year, down from 3.4% in July. Both declined by 0.1% month-on-month. The market had expected both the overall and core PPI to rise month-on-month and for the year-on-year increase to expand further. The actual results were completely contrary to market expectations. 

Gold prices are not influenced by inflation. 

Logically, forward-looking indicators suggesting a reduction in inflationary pressure should give the Federal Reserve more room to cut interest rates, which would be beneficial for gold prices. However, gold is also regarded as an inflation hedge. If inflationary pressure decreases, the inflation-hedging role of gold will also diminish, leading to a decline in gold prices. Conversely, if inflation rises, it indicates that the Fed has less room to cut rates and may even face pressure to raise rates, which would also put downward pressure on gold prices. Therefore, investors should not judge the rise and fall of gold prices solely based on inflation. Especially given that global interest rates have risen significantly compared to pre-pandemic levels and most economies are in a positive real interest rate environment, gold, which cannot appreciate on its own, naturally loses its luster. 

It is expected that the short-term range will fluctuate between 3610 and 3660. 

From the hourly chart, the spot gold price rose to $3,674 and has since developed into a narrowing triangle, oscillating around the median of the range at $3,647.5. If the gold price opens above the downtrend line and closes higher within any one-hour period in the future, it can be confirmed that an upward breakout has occurred, with a measured target of $3,657. Conversely, if it breaks below the uptrend line, the lowest measured target is $3,610. Measured by the Fibonacci extension line from the movement since September 10th, if the extent reaches 100%, the gold price could reach close to $3,672. From the Gann Square perspective, the gold price is expected to fluctuate within the range of $3,660 to $3,610 in the short term. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu