Gold prices experienced a sharp selloff in the previous session, with the metal declining steadily from the Asian open and showing little rebound during the European session before plunging over $100 to touch $4,066 in New York trading. Prices staged a significant recovery late in the day, climbing back above $4,100, and ultimately settled at $4,110, forming a bearish candlestick on the daily chart.
On Thursday, October 8, the US dollar index closed near 102.25 after touching 102.50 intraday, approaching an 18-month high, while the 10-year US Treasury yield spiked to 5.364%, the highest level since 2002, with the 30-year yield reaching 5.669%. Since gold generates no yield, such elevated rates essentially impose an invisible interest cost on holding each ounce, driving capital toward interest-bearing assets instead.
The Federal Reserve released the minutes from its September meeting at 2 AM Beijing time. The September 15-16 session saw a 25 basis point rate hike that lifted the target range to 3.75%-4.00%, with all 12 voting members in favor. While there were differing views on the rationale for the hike, the direction remained unchanged, and expectations for another increase in December have not dissipated, creating a ceiling that caps gold prices.
From a technical perspective, the Bollinger Bands are opening downward, with gold trading along the lower band. The lower band sits near $4,085, while the middle band is around $4,215. Prices hugging the lower band indicate that bearish momentum is still being released without clear signs of convergence. On the daily chart, both MACD lines remain below the zero axis, and although the green bars have contracted somewhat, no golden cross has formed. Bearish momentum persists, but is weakening at the margin. This situation could either be a precursor to an accelerated decline or the groundwork for an oversold rebound. The key lies in whether prices can establish a firm footing at some level.
In summary, on the first day after the holiday, the domestic market may need to catch up with losses, and there could be an emotional release at the open. Position sizing should be kept below 30% of normal levels, waiting for stabilization signals before entering, as there is no rush. Conservative traders may prefer to observe rather than act today, waiting for clearer direction after gold repeatedly tests the $4,100 level. For intraday trading, the recommendation is to short gold at $4,115-$4,120 with a stop loss at $4,130, targeting $4,050-$4,030. If price holds above $4,130, abandon the short position and buy on pullbacks, targeting successively higher levels.
Key economic data and events to watch today, Thursday, October 8, 2026: The European Central Bank releases its September monetary policy meeting minutes at 19:30, Bank of England Governor Bailey speaks at 20:15, US initial jobless claims for the week ending October 3 are due at 20:30, US August wholesale sales month-over-month data at 22:00, and Federal Reserve's Musalem speaks at 01:40 the following day.