Gold market analysis

"Gold Price May See Strong Rebound Only When It Hits 3,690" 25/9/2025 9:45 Completed 

The volatility of gold prices is increasing and becoming more one-sided - downward. Investors need not doubt whether the gold price is "dry falling", because there is no price without volume. Looking further back, such a large fluctuation naturally reflects that a large amount of funds are trading. According to an expert with over 40 years of experience in gold trading and research, the gold price is no longer simply influenced by the supply and demand of gold, but is driven by a large amount of funds flowing into the gold market. It can be imagined that the higher the gold price rises, the more hedging actions gold merchants will take. Unfortunately, under the pursuit of a large amount of funds, the gold sold by gold merchants cannot meet market demand, and the gold price is thus pushed up. 

Speculators began to take profits and exit the market. 

However, after hitting a record high of $3,791 at 5 p.m. on Tuesday, the spot gold price has been on a downward trend. Yesterday, the spot gold price reached a high of $3,779.33 in the early trading session in London but then weakened. In theory, gold dealers would continue to sell at high prices, but the buying support was clearly insufficient. Not only did the gold price continue to fall, but it also failed to stabilize at a certain level. This leaves only one possibility: gold market speculators have also begun to take profits and exit the market! After the opening of the New York market yesterday, the decline in the gold price intensified. It hit a low of $3,717.54 in the late trading session in New York before gradually recovering. 

Gold prices are constrained by the 20 SMA on the hourly chart. 

From the hourly chart, the recent gold price rally began last Friday and ended on Tuesday this week. So far, the maximum decline has exceeded 38.2% (3728.83) of the rally but has not reached 50% (3709.6). The gold price started a rebound wave in the late New York session yesterday and reached a high of 3751.57 dollars this morning, slightly exceeding 50% (3748.44) of the maximum decline since yesterday. It was clearly constrained by the 20SMA on the hourly chart (3752.8) and also by the neckline of the double top on the hourly chart. Subsequently, the gold price fell again. Under the influence of multiple technical resistances, the gold price is expected to further test the lower level. 

Measuring the movement since $3,779.33 with the Fibonacci extension line and calculating at a 1:1 ratio, the gold price will fall to $3,689.89. This level is also the 61.8% retracement target of the rally from September 19 to 23. It is believed that the gold price will find stronger support at this level and is very likely to trigger another strong rebound wave. 

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

MTF Special Analyst Zheng Guangfu