Gold market analysis

Gold prices are expected to rise further. 14/7 10:10 am Completed. 

Gold prices reversed their recent decline last Friday, reaching as high as $3,369, far exceeding my expected resistance level of $3,350. However, they eventually closed at $3,355. Is this the beginning of a new upward trend for gold prices, or is it merely a release of accumulated energy, with stop-loss orders and new buying pushing prices up before returning to a sideways pattern? 

Last Friday, Trump announced that the United States would impose a 35% import tariff on Canada and Mexico, and a 30% tariff on Mexico and the European Union. If the three parties take countermeasures, the United States will impose additional tariffs on the relevant rates. On the other hand, the market suddenly reported that Federal Reserve Chair Powell was considering resigning. If this is true, investors may think that the successor will surely comply with Trump's request and take interest rate cut actions, which is beneficial to gold prices. However, another scenario may occur. If the successor lowers short-term interest rates, investors may think that in the current US economic and employment situation, it is very likely to push up inflation, and long-term interest rates will rise, which is unfavorable to gold prices. 

Gold prices are expected to consolidate above the 20-day moving average. 

Technically, gold closed above the July 8 high of around $3,346 and the 20-day SMA ($3,338.8) on the daily chart last Friday, and clearly broke through the TD supply line (downward track). The measured upside target is approximately $3,474. As this is a preliminary upward break, the 14-day average directional index (ADX) has not shown a clear upward trend yet. Although the +DMI has broken above the -DMI, it has been entangled frequently in recent times. However, if gold can close above the 20-day SMA and the TD supply line for at least three consecutive trading days, it will further confirm the upward trend. 

Silver prices hit a new high; cautious optimism prevails. 

Gold prices opened sharply higher in the Asian session this morning, reaching a high of $3,373. The 38.2% retracement target of $3,339 since July 9th can be regarded as the first important support level, which is also slightly above the 20-day SMA. If gold prices are once again dominated by bulls, they should consolidate above the 20-day SMA before launching another offensive. Short-term trading is more favorable for buying on dips, with $3,339 as the support level and the short-term target at $3,401. Additionally, silver prices also reached a new high of $38.64. The short-term outlook is cautiously optimistic, but if it closes below $38.40 on the hourly chart, long positions should be taken off. The first important support level for silver is $37.90. 

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

MTF Special Analyst Zheng Guangfu