Gold's rebound struggles to break through resistance! Why can't the stock market sell-off lift safe-haven metals? Who's controlling this market trend?
2025-11-05 20:39:07
On Wednesday (November 5), spot gold rebounded during the Asian and European sessions, rising to a high of 3986 (about 1.4%) before pulling back slightly. It is currently trading around 3958, up 0.66%.
The recent strong rise in the US dollar index, reaching a near 6-month high and remaining at the key level of 100, which has significant implications for both bullish and bearish sentiment, is putting considerable downward pressure on precious metal prices.
Despite the global stock market sell-off and the overall rise in risk aversion, these two traditional safe-haven metals have not yet received a significant boost – at least not yet – the transmission effect is not yet apparent. Instead, the US dollar index is exerting a particularly strong downward pressure on gold prices. Traders need to pay close attention to all information regarding the US dollar index, such as the ADP non-farm payroll data released by the US.
The following are some recent relevant market developments.
Global stock markets faced significant selling pressure on Tuesday and Wednesday, with major U.S. stock indices recording substantial declines. The core reason was Wall Street's deep concern about the current high valuations of the stock market and the risk of a bubble in the artificial intelligence sector.
The trigger was that Michael Burry, the real-life inspiration for the movie "The Big Short," had recently shorted two of the most representative companies in the AI boom—NVIDIA and Palantir (PLTR)—and even disclosed his holdings on social media, as well as making comments that were bearish on US AI technology stocks.
Several Wall Street executives have made it clear that investors need to be prepared for a potential correction of more than 10% in the stock market over the next 12 to 24 months, and that such a correction is actually a positive market clearing process.
The signal reflected in the trading session was that Palantir Technologies Inc., despite raising its annual revenue forecast to $4.4 billion and reporting third-quarter sales that exceeded analysts' expectations—with revenue increasing 63% year-over-year to $1.18 billion in the quarter ending in September—still saw its stock price fall by about 3% in after-hours trading, having fallen as much as 8% during the day, due to concerns about its high valuation following its previous record-breaking stock price surge (the stock was valued at approximately 600 times PE before the third-quarter report).
Palantir's CEO stated that his chosen targets were us and Nvidia, two companies that happen to be extremely profitable, which is very strange.
It is worth noting that, as mentioned in previous articles, the loss of gold's safe-haven attributes is not only due to the suppression of the US dollar index (a rising US dollar index means higher gold prices, suppressing demand), but also because gold prices are near a fragile technical level during a rebound after a rapid rise. Due to trading constraints, gold has lost some of its safe-haven asset attributes.
The Republican Party lost several key positions in non-election year elections. In Virginia, a crucial swing state, the Democratic candidate defeated the Republican candidate to become the state's first female governor and lead the Democratic Party to achieve full control of the three branches of government (governor, lieutenant governor, and attorney general). Meanwhile, 34-year-old democratic socialist Zohran Mamdani was elected mayor of New York City with 58% of the vote, defeating the independent candidate supported by Trump.
With the negotiation deadlock between Democrats and Republicans extending into the new month, and the US government shutdown approaching its longest in history this week, both events have increased the attractiveness of the US dollar as a safe-haven asset.
However, it is worth noting that some US lawmakers are currently signaling that the federal government is expected to return to normal operations by the end of this week.
With the support of Interpol, Brazilian police destroyed hundreds of dredging vessels used for illegal gold mining along the Madeira River in one of the largest joint operations to date targeting criminal networks in the Amazon basin.
Interpol stated that law enforcement officers dismantled 277 floating mining rafts, with the equipment valued at approximately $6.8 million. Including the lost gold, equipment, and environmental damage, officials estimate the total economic losses suffered by organized crime groups to be approximately $193 million.
Such gold control measures also reflect the phenomenon that rising gold prices have led some unscrupulous businessmen to take risks. There may be similar official actions in the future, which could suppress the supply and trading of gold.
After the key price level of 3972 was broken, it has now become a resistance level for gold prices to rebound. At the same time, if gold prices fail to rebound and recover this price level, the trend will be favorable for the bears, with 3922 and 3899 as support levels.
As the 5, 10, 20, and 30-day moving averages all exert downward pressure on gold prices, the price is likely to trend bearish until it recovers the 3972 level.
(Spot gold daily chart, source: FX678)
At 20:30 Beijing time, spot gold is currently trading at $3,967 per ounce.
The recent strong rise in the US dollar index, reaching a near 6-month high and remaining at the key level of 100, which has significant implications for both bullish and bearish sentiment, is putting considerable downward pressure on precious metal prices.
Despite the global stock market sell-off and the overall rise in risk aversion, these two traditional safe-haven metals have not yet received a significant boost – at least not yet – the transmission effect is not yet apparent. Instead, the US dollar index is exerting a particularly strong downward pressure on gold prices. Traders need to pay close attention to all information regarding the US dollar index, such as the ADP non-farm payroll data released by the US.
The following are some recent relevant market developments.
A global sell-off led to safe-haven flows into the US dollar index, putting downward pressure on gold prices.
Global stock markets faced significant selling pressure on Tuesday and Wednesday, with major U.S. stock indices recording substantial declines. The core reason was Wall Street's deep concern about the current high valuations of the stock market and the risk of a bubble in the artificial intelligence sector.
The trigger was that Michael Burry, the real-life inspiration for the movie "The Big Short," had recently shorted two of the most representative companies in the AI boom—NVIDIA and Palantir (PLTR)—and even disclosed his holdings on social media, as well as making comments that were bearish on US AI technology stocks.
Several Wall Street executives have made it clear that investors need to be prepared for a potential correction of more than 10% in the stock market over the next 12 to 24 months, and that such a correction is actually a positive market clearing process.
The signal reflected in the trading session was that Palantir Technologies Inc., despite raising its annual revenue forecast to $4.4 billion and reporting third-quarter sales that exceeded analysts' expectations—with revenue increasing 63% year-over-year to $1.18 billion in the quarter ending in September—still saw its stock price fall by about 3% in after-hours trading, having fallen as much as 8% during the day, due to concerns about its high valuation following its previous record-breaking stock price surge (the stock was valued at approximately 600 times PE before the third-quarter report).
Palantir's CEO stated that his chosen targets were us and Nvidia, two companies that happen to be extremely profitable, which is very strange.
It is worth noting that, as mentioned in previous articles, the loss of gold's safe-haven attributes is not only due to the suppression of the US dollar index (a rising US dollar index means higher gold prices, suppressing demand), but also because gold prices are near a fragile technical level during a rebound after a rapid rise. Due to trading constraints, gold has lost some of its safe-haven asset attributes.
Government shutdown nears record long; Republicans lose non-election year election.
The Republican Party lost several key positions in non-election year elections. In Virginia, a crucial swing state, the Democratic candidate defeated the Republican candidate to become the state's first female governor and lead the Democratic Party to achieve full control of the three branches of government (governor, lieutenant governor, and attorney general). Meanwhile, 34-year-old democratic socialist Zohran Mamdani was elected mayor of New York City with 58% of the vote, defeating the independent candidate supported by Trump.
With the negotiation deadlock between Democrats and Republicans extending into the new month, and the US government shutdown approaching its longest in history this week, both events have increased the attractiveness of the US dollar as a safe-haven asset.
However, it is worth noting that some US lawmakers are currently signaling that the federal government is expected to return to normal operations by the end of this week.
Brazil joins forces with Interpol to crack down on illegal gold mining in the Amazon.
With the support of Interpol, Brazilian police destroyed hundreds of dredging vessels used for illegal gold mining along the Madeira River in one of the largest joint operations to date targeting criminal networks in the Amazon basin.
Interpol stated that law enforcement officers dismantled 277 floating mining rafts, with the equipment valued at approximately $6.8 million. Including the lost gold, equipment, and environmental damage, officials estimate the total economic losses suffered by organized crime groups to be approximately $193 million.
Such gold control measures also reflect the phenomenon that rising gold prices have led some unscrupulous businessmen to take risks. There may be similar official actions in the future, which could suppress the supply and trading of gold.
Technical Analysis:
After the key price level of 3972 was broken, it has now become a resistance level for gold prices to rebound. At the same time, if gold prices fail to rebound and recover this price level, the trend will be favorable for the bears, with 3922 and 3899 as support levels.
As the 5, 10, 20, and 30-day moving averages all exert downward pressure on gold prices, the price is likely to trend bearish until it recovers the 3972 level.
(Spot gold daily chart, source: FX678)
At 20:30 Beijing time, spot gold is currently trading at $3,967 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
