Gold market analysis

Gold prices are expected to challenge $3,375 again. 21/7 10:00 am Completed. 

Gold prices last week generally followed a pattern of falling first and then rising. The settlement price of the CME's main August gold futures contract was $3,358.3 per ounce, up $13 or 0.4%. The last trading price was $3,355.5. Spot gold closed at around $3,350. Although gold prices recovered most of their losses in the last two trading days of last week, for the entire week, after rising for two consecutive weeks, gold prices closed lower last week. The holdings of the SPDR Gold ETF changed only on three days last week. Although it increased by 3.15 tons on Wednesday, it reduced by a total of 7.17 tons in the following two days, resulting in a net reduction of 4.02 tons to 943.62 tons for the entire week. 

Tariff agreements remain the main cause of gold price fluctuations. 

As countries are still striving to sign trade agreements with the United States before August 1st, it is expected that the gold price will continue to fluctuate in response to the gradually released agreement results before that date. A clearer trend is likely to emerge after August 1st. On the other hand, US President Trump has been constantly criticizing Federal Reserve Chair Powell's monetary policy and even pressuring for his dismissal. However, so far, there has been no concrete action. Therefore, unless the position of the Federal Reserve Chair is actually going to change, this incident will only cause short-term volatility in the gold price and even the financial market. 

In terms of geopolitics, Trump assured Ukraine that it would be provided with advanced weapons to counter Russia. Additionally, he imposed sanctions on Russian oil and threatened to impose secondary tariffs of up to 100% on countries purchasing Russian oil. I believe the aim is to force Russia to end the conflict with Ukraine as soon as possible, rather than, as some market analyses suggest, reigniting the conflict between Russia and Ukraine. 

The $3,351 level in gold prices is expected to form a double top neckline. 

As for the gold price, after the spot gold price broke through the TD downtrend line on July 11th, the pullbacks from last Tuesday to Thursday did not form an effective bearish signal. Therefore, the medium-term target remains at $3,474. From the hourly chart, the gold price has also broken through the downtrend line since July 14th. Hence, the immediate adjustment is expected to hold above the extension support of the upward trend line (approximately $3,342). 

Gold prices rebounded after hitting a low of 3,351 in the early Asian session this morning, coming close to 10 dollars short of the 38.2% retracement level of 3,341.69 dollars from last Thursday to Friday's biggest gain. This indicates that gold prices still maintain a strong upward momentum. If it breaks through last Friday's high of 3,361.28 dollars and holds above it, it is expected to rise to 3,374.28 dollars before a significant correction. If the attempt fails, it is likely to fall back in a small double top pattern, with 3,351 dollars as the first target for testing the neckline. If it breaks below, the measured target of 3,340.74 dollars will be tested. Another possibility is that if gold prices break through 3,361.28 dollars but are blocked at the July 15th top of 3,366 dollars and show a divergence with the 9-day RSI, it will fall back. In that case, 3,351 dollars will still be an important support level for the double top neckline. 

The above content is for reference only and does not constitute investment advice. MTF Special Analyst Zheng Guangfu