XAU – Gold consolidates at low levels, with an eye on US-China trade negotiations and US CPI

US Treasury Secretary Benson said President Trump currently plans to have a "sideline chat" with Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation (APEC) summit in South Korea. In an interview with Fox Business, Benson said he will travel to Malaysia on Wednesday evening to meet with Chinese Vice Premier He Lifeng in an effort to resolve the dispute over China's rare earth export controls and potential US retaliatory measures before the APEC summit, which takes place from October 31 to November 1.

Gold fell to a near two-week low of 4,003 on Wednesday, extending the previous day's sharp decline. Gold retreated sharply from its record-breaking rally, impacted by overvaluation and investor profit-taking. Geopolitical concerns may limit gold's downside. The planned summit between US President Trump and Russian President Vladimir Putin has been postponed, and the prospects for a potential meeting between Trump and Chinese President Xi Jinping remain uncertain.

This Friday, the U.S. Consumer Price Index (CPI) report is expected to show core inflation holding steady at 3.1% in September. The report's release was delayed by the U.S. government shutdown. Investors have almost fully priced in a 25 basis point interest rate cut at the Federal Reserve (FED) meeting next week. Investors are also awaiting clarity on a possible meeting between Trump and Chinese President Xi Jinping next week.

Gold has managed to hold above $4,000 for now amidst this recent sell-off, and has rebounded briefly, reaching $4,161 on Wednesday, but has since retraced back to levels above the $4,000. Gold hit a record high of $4,381 on Monday, but by Wednesday, it had fallen by over $370. The $4,000 is not only a psychological barrier but also serves as a supporting level for the trend line that has formed since the gold price rose in late August. Therefore, it has been quite important in the short term. However, caution is advised if gold breaks below this level, as the overall correction could continue significantly. The nearest support is currently expected at $4,069 and $4,051, with further support at $4,034 and $4,015, and further support at $4,005 and $3,978. The resistance is expected at $4,109 and $4,129, with the next levels at $4,164 and $4,172, and further levels at $4,188 and $4,209.

London Gold October 23rd
Early Forecast Range: 4069 – 4109
Resistance: 4129 – 4164 – 4172 – 4188 – 4209
Support: 4051 – 4034 – 4015 – 4005 – 3978

SPDR Gold Trust Gold Holdings:
October 13th – 1,018.88 tons
October 14th – 1,021.45 tons
October 15th – 1,022.60 tons
October 16th – 1,034.62 tons
October 17th – 1,047.21 tons
October 20th – 1,058.66 tons
October 21st – 1,058.66 tons
October 22nd – 1,052.37 tons

22/10 AM London Gold Fix: $4081.5 
22/10 PM London Gold Fix: $4070

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