Takeaway

The presenter argues that Gold has turned decisively bearish after breaking below its 200-day EMA and key support at 4,300. This move was triggered by hotter-than-expected US core PCE data, which has significantly increased market expectations for a Fed rate hike this week and another in December, strengthening the US dollar and bond yields.

What the presenter said

• Gold broke below a key support level and is now trading at a five-week low, having fallen 1.8% last week and another 1.4% on Monday. [00:06]
• The driver was hotter than expected US core PCE data, which rose 0.3% month-on-month versus 0.2% expected. [00:38]
• As a result, the market is now pricing in an 85% probability of a 25 basis point Fed rate hike this week, up from 60% before the data. [00:50]
• The market is also convinced the Fed will hike again in December, which increases the opportunity cost of holding gold by lifting bond yields and the US dollar. [01:15]
• Technically, gold has just broken below the 200 EMA, with attention now turning to downside support levels. [02:30]
• While disruption to Saudi Arabia's East-West pipeline adds geopolitical risk, the presenter notes the resulting inflation expectations are currently bearish for gold as they pressure yields higher. [02:20]

Trade ideas

The presenter did not put forward an actionable trade. The overall market view is bearish, with the focus on further downside potential after the break of key technical support.

Levels and data cited

• Gold Support Levels: 4,200 (next focus), 4,100 (March low), and 3,940 (2026 low). The price has already fallen below 4,300.
• US Core PCE (MoM): 0.3% (vs. 0.2% expected).
• Fed Rate Hike Probability (This Week): 85% (up from 60%).

Risks and what would invalidate this

• Fuel supply risks in the Middle East due to pipeline disruption.
• Rising inflation expectations from higher oil prices could continue to put upward pressure on yields, which the presenter sees as a drag on gold.