Gold market analysis

Gold prices are expected to challenge the $3,350 mark in the short term. 11/7 10:08 am Completed.

The United States' trade negotiations with various countries are still ongoing. The United States has imposed a reciprocal tariff of 50% on Brazil, which is the highest so far. Additionally, the United States has also imposed a 35% reciprocal tariff on its neighboring country, Canada. Trump stated that only Canadian enterprises that set up factories in the United States can be exempted from the 35% tariff. He further promised to expedite the relevant approval process within a few weeks. However, he also warned that if Canada takes retaliatory measures by imposing additional tariffs, the United States will double the existing tariffs. 

As there were no significant economic data releases in the US this week, the gold price slowly rebounded after a sharp drop on Tuesday. The spot gold price was held back at $3,330 as expected yesterday and eventually closed at the $3,323 level. However, in the early Asian session today, the spot gold price rose sharply to $3,336, then quickly retreated and is currently hovering around the $3,330 level. It is estimated that this is due to the US and Canada raising reciprocal tariffs, which has once again raised market concerns. The gold price took advantage of the quiet trading in the early Asian session to catch the bears off guard. From the trend, the possibility of a further short-term rise in the gold price has increased. 

The daily chart still shows a descending flag pattern. 

From the hourly chart, it can be observed that the price broke through the resistance of the downtrend channel this morning. The measured upward target is $3,380. Conversely, if the price breaks down, the current measured downward target is $3,295. As time goes by, the downward target will only be higher, not lower. Additionally, investors should still note that the daily chart of gold is currently in a descending flag pattern. The price must close above the high of around $3,346 on Tuesday this week to have a chance to reverse the decline since June 16th. 

In the short term, if the gold price closes below $3,323.65 on the hourly chart, it can be regarded as a preliminary signal of a decline. The target for the fall is $3,310. Moreover, the cumulative rebound of the gold price since the beginning of this month has slightly exceeded the Fibonacci 100% extension level of $3,332, indicating a potential downward risk. If the cumulative increase reaches 1.382 times, the gold price could reach $3,351.2, slightly higher than the high of around $3,346 on Tuesday this week. Therefore, it can be inferred that even if the gold price continues to rise, the upward trend is expected to be blocked around $3,350. Optimistically speaking, the gold price is expected to fluctuate between $3,320 and $3,350 in the near term. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu