On Tuesday (10/10), after two consecutive trading days of sharp increases, the upward trend of spot gold moderated somewhat. There was a slight decline during the day, but it still closed at 1,860 US dollars in the recent high region.

Following the dovish remarks made by two important Fed officials on Monday, Atlanta Fed President Bostic's latest remarks on Tuesday also indicated that the Fed does not need to raise interest rates further. Bostic told the American Banking Association that the Fed's policy is already restrictive enough. He also believes that there will be no recession in the future. The Fed's interest rate hike will lead to a slowdown in the economy and a decline in inflation. This comment was made in part in response to the Israel-Gaza conflict. However, since Bostic is not on the Fed's voting committee this year, he does not have the right to vote. As a result, his dovish remarks did not give much impetus to gold. However, we have also seen that the ongoing bloody conflict in the Middle East and the dovish remarks made by Fed officials at the beginning of this week have begun to drastically reduce US bond yields. On Tuesday, the indicator 10-year bond yield fell from Monday's high of 4.887% to an intraday low of 4.618%. The market seems to be beginning to be flooded with expectations that the Fed will stop the cycle of interest rate hikes. Furthermore, as Israel declared war on Hamas, the market is also closely watching the Middle East. What is surprising, however, is that the precious metals market does not seem to have reacted more strongly to the major geopolitical crisis. The Wall Street Journal reports that the financial markets reacted more strongly to the US employment report last Friday than to the violent events in the Middle East over the weekend. Even so, we must not ignore the fact that this violent incident is the worst for Israel in 50 years, and it is not yet known whether the conflict will continue to escalate and whether the spillover effects will continue to expand. Whether this sudden geopolitical military conflict will eventually affect the end of the US interest rate hike cycle is quite puzzling.

On a technical level, as can be seen from the daily chart, since the market stopped falling and rebounding last Friday, the market has rebounded all the way, but currently it has intervened in the operation of a strong zone. The suppression of the upper part by the moving average system has not completely broken away from the sea of suffering in the short term. In the short term, it is likely that the effectiveness of lower support still needs to be stepped back and confirmed. Currently, we continue to focus on support for 1843 and 1830 below. If it can hold above the above support level through a pullback, it is expected to rebound further upward. Conversely, if it fails, then gold's rebound may hopefully come to naught.

Bank of China Guangdong Branch Wang Gang

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