Gold market analysis

Gold price has been blocked three times above $3,430 24/7 09:25 am Completed 

It is reported that the EU and the US are making progress towards reaching a 15% tariff agreement. EU diplomats said that member states may be prepared to accept a 15% tariff rate. EU officials are pushing for this rate to cover industries such as automobiles, but steel and aluminum imports exceeding a certain quota will face a 50% tariff. They also pointed out that although the EU is optimistic about reaching an agreement, they emphasized that the final agreement still depends on the unpredictable US President Trump's decision. 

In addition, the Japan Broadcasting Corporation quoted a Japanese government official as saying that the United States and Japan have agreed to reduce the tariff on Japanese automobiles to 15%. According to sources, Japan will increase the proportion of rice imported from the United States as part of the trade agreement, but will still maintain the overall framework of the minimum access for rice imports. 

The upward trend remains unchanged with the closing price holding steady at $3,383. 

The two major world economies gradually reached trade agreements with the United States, pushing the S&P 500 to a new high, while the Dow Jones and Nasdaq were approaching their historical highs. The safe-haven role of gold weakened, causing a sharp drop in its price. After hitting a low of around $3,381 in London, it rebounded slightly but failed to regain the $3,400 mark, peaking at $3,396. In the early Asian session today, it remained stable above $3,390. 

From the daily chart, the spot gold price yesterday presented a double-day reversal pattern. It was the third time since early June and early May that it rose above $3,430 but was clearly blocked. Conversely, if the gold price breaks through $3,450 and closes above that level, the possibility of a new high will also increase significantly. In the short term, as long as the gold price continues to close above $3,383, the upward trend since July 9 remains unchanged. 

Beware of a sharp rebound after testing $3,374.5 

From the hourly chart, gold prices have dropped to the bottom of the horizontal range on Tuesday at around $3,380, where support is seen. The cumulative adjustment is over 38.2% of the biggest increase since last Thursday. This is more than $7 away from the strong support level of 50% retracement at $3,374.5 mentioned yesterday. Optimistically, gold prices are expected to hold above $3,385 for consolidation within the day. Even if they test $3,374.5, it is expected that there will be strong support at this level, leading to a significant rebound and ultimately forming a favorable long-tailed hammerhead pattern on the daily chart. However, gold prices must not close below $3,383 on the daily chart. Otherwise, the market is likely to test the 20-day and 50-day SMAs at $3,343 and $3,383 respectively before a potential rebound. The main resistance for the intraday rebound is at $3,405 and $3,410. 

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