[10/28 Market Analysis] Gold rebounds after sharp drop | Tech stocks continue to rise, focus on FOMC tonight
In the October 28th market, the strength of AI-related stocks continues to stand out.
The NASDAQ rose 1.18% and the SOX index rose 3.6%, with semiconductor stocks leading the gains and supporting the overall US stock market.
Meanwhile, crude oil fell for the second consecutive day on expectations of easing tensions in the Middle East.
However, concerns about supply disruptions have not completely disappeared, and WTI remains at a six-month high.
And tonight, in addition to the earnings reports from Alphabet and Microsoft, the FOMC is also scheduled.
Since there is a possibility of significant market movement, today is a day to be more cautious than usual.
Previous day’s market
💰 XAU/USD: +1.10%
🛢 USO/USD: -1.05%
💵 USDX: +0.35%
📈 S&P500: +0.60%
📈 NASDAQ: +1.18%
📈 DJ30: +0.03%
1. US Dollar Index | The rise is strong, but do not chase before the FOMC
The dollar index continued to rise yesterday with almost no significant pullbacks.
In the short term, buying momentum is strong, and no clear bearish reversal has been confirmed at this time.
However, the FOMC is coming up tonight.
The market expects the policy interest rate to remain unchanged, and what is more important is how the subsequent statements and the probability of a rate hike in December will change.
Therefore, rather than chasing the current price to buy, it is easier to wait for a pullback.
Today’s outlook
・Short-term view: Buying dominant
・Strategy: Waiting for a pullback
・Important material: Dollar reaction after FOMC
2. Gold | Short-term outlook changes with the break of 4030
Gold broke through the $4030 level yesterday, which had previously capped its upside.
After that, it rose sharply to near the long-term moving average.
The trend has changed slightly in the short term from the range-bound market at the lows that had been continuing until now.
It corrected again to near $4030 this afternoon, but there are signs of a bottoming out at this level now.
In other words, it is important whether $4030, which was previously resistance, will now function as support.
Today’s focus prices
Buy target: $4035–$4040
Stop loss: Below $4025
Take profit target: $4060–$4065
Support: $3960
Resistance: $4220
The key point this time is whether it can maintain $4030.
If it can hold this level, we can expect a move to test higher levels in the short term.
3. Crude Oil | Even with a 2-day decline, the major uptrend has not yet broken
Crude oil prices fell for the second consecutive day due to expectations of easing tensions in the Middle East.
However, the decline itself is still limited.
WTI is still maintaining the $100 level and is in a 6-month high range.
Since a downward channel is forming on the short-term chart, this is a situation where we want to be mindful of selling on rallies tonight.
Today’s focus prices
Sell target: $102.2–$102.5
Stop loss: Above $103.0
Take profit target: $100.7 – $101.0
Support: $96.5
Resistance: $104.6
However, it is worth noting that although the long-term moving average was tested yesterday, it has not yet clearly broken below it.
Therefore, rather than assuming a ‘major downward trend from here,’ it is better to consider it as a short-term sell targeting the vicinity of yesterday’s low.
4. US Stocks | Momentum in AI and semiconductor stocks continues
Yesterday’s US stock market performance was:
S&P 500: +0.60%
NASDAQ: +1.18%
DJ30: +0.03%
as follows.
In particular, buying in AI-related sectors continues, and the strength of semiconductor stocks is notable.
The SOX index rose significantly by +3.6%.
And tonight, earnings announcements for Alphabet and Microsoft are scheduled.
AI investment, cloud business, capital expenditure, and future growth outlooks are likely to be important factors in determining the next direction for the NASDAQ.
5. FOMC tonight | Beware of sudden market changes
The biggest event today is the FOMC.
At this point, the policy interest rate is expected to remain unchanged.
Therefore, what the market is focusing on is
・Views on inflation
・Possibility of a December rate hike
・Future monetary policy stance
These are the key points.
Immediately after the announcement, there is a possibility of sharp price movements in the dollar, gold, and stock indices.
Especially today, it seems safer to confirm the direction after the FOMC rather than building large positions before the announcement.
Today’s Summary
💵 Dollar Index
→ Upward trend continues. However, do not chase before the FOMC; wait for a dip.
💰 Gold
→ Rebounded after breaking through 4030. Short-term strategy is to buy the dip.
🛢 Crude Oil
→ Declined for the second consecutive day but remains in a high range. Short-term strategy is to sell on rallies.
📈 US Stocks
→ AI and semiconductor stocks remain strong.
What I want to pay special attention to today is,
・The direction of the dollar after the FOMC
・Whether 4030 will act as support for gold
・A rebound for gold to 4060–4065
・The battle around the 100–101 dollar level for crude oil
・Alphabet and Microsoft earnings
・Whether the rise in semiconductor stocks will continue
These 6 points.
It is a day with many events, so I want to be more conscious of position sizing and risk management than usual.
Finally
Thank you for reading until the end 😊
Regarding this analysis,
“Can gold aim for 4100 as it is?”
“What will happen to the dollar after the FOMC?”
“Will crude oil break below 100 dollars?”
If you have any questions or concerns, please let me know in the comments.
I will continue to summarize the daily market as clearly as possible, focusing on the dollar, gold, crude oil, and US stocks.
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