Gold market analysis

"Gold Price is Expected to be Weak at First and Then Strong This Week" 28/7 10:00am Completed

After the United States signed trade agreements with Japan, the Philippines, Indonesia and Vietnam, the market was optimistic about other countries reaching trade agreements with the United States before the high tariff deadline of August 1st. Among them, the United States and the European Union eventually reached a framework agreement. The United States will impose a 15% tariff on imported goods from the European Union, and the European Union will increase its investment in the United States by 600 billion US dollars And to purchase military equipment and energy products worth 750 billion US dollars from the United States. In addition, the United States and China will hold a new round of trade negotiations in Sweden starting today. Trump, as always, has made a statement in advance, indicating that he is very close to reaching a trade agreement with China. On the other hand, market expectations that the Federal Reserve will keep interest rates unchanged after this week's interest rate meeting have put pressure on gold prices.

The U.S. July jobs report is expected to deteriorate

CME's July gold futures closed at $3,329.1, down 1.24%. Although the spot gold price dropped to $3,325 last Friday, it eventually closed above $3,337, slightly lower than the strong support of $3,340 mentioned last Friday. Although the Federal Reserve is expected to keep interest rates unchanged this week, it is highly likely to hint at considering a rate cut at the remaining meetings of this year. Therefore, gold prices may not sell off further due to the authorities' inaction. On the other hand, the United States will release the ADP private sector job changes, PCE and official employment reports for July from Wednesday to Friday this week. The market expects that the official non-farm payrolls for July will increase by 108,000, lower than 147,000 in June, and the unemployment rate is expected to rise by 0.1 percentage point to 4.2%. All these are favorable for gold prices.

Gold prices are expected to stabilize at $3,320

Technically, the spot gold price is at the bottom of the upward channel since June 29th on the hourly chart, and it is also around the 50% retracement level of the largest increase so far that day, at $3,343.3. However, it is expected that the gold price will show a trend of being weak at first and then strong this week. It is anticipated that the gold price will bottom out and rebound today or on Wednesday. If the gold price drops to $3,290, This meets the goal of a 100% expansion of the Fibonacci on the hourly chart. It is expected that a strong rebound will occur at that time. It is estimated that the fluctuation range of gold prices this week will be between $3,290 and $3,365.

Spot gold prices rebounded after trying on $3,324 in the early Asian session today, seemingly having digested the outcome of the trade agreement reached between the US and Europe. It is believed that this week the market will mainly focus on the Federal Reserve's interest rate decision and a series of important US economic data. Gold prices are expected to have support at $3,320 within the day, while the resistance for the rebound will be $3,351 and $3,368.

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

Zheng Guangfu, a special analyst of MTF