Gold market analysis

"Gold Price Friend's Final Blow" 29/7 09:12am completed
The impact of the framework trade agreement reached between Europe and the United States on the financial market continues to intensify. The S&P 500 index and the Nasdaq Composite Index have reached new highs, the US dollar exchange rate has strengthened, and the Federal Reserve is about to hold an interest rate meeting, which is expected to keep interest rates unchanged. All these factors are unfavorable for gold prices. Yesterday, in the early opening of the European market, the spot gold price reached a high of $3,345 and then fluctuated downward. In the early opening of the New York market, it fell below $3,302 before gradually recovering. In the late opening of the New York market, it approached $3,319, but then fell back again. This morning, in the Asian market, it fell below $3,310 once more.

Gold prices are still expected to rebound in the short term

The weakening of gold prices was expected. At present, I still maintain the view that gold prices bottomed out yesterday or this Wednesday. Also, once gold prices fall to $3,290, it will meet the 100% expansion of Fibonacci, and a strong rebound is expected at that time. However, the gold price can be said to have reached a critical stage of life and death. As seen from the daily chart, the gold price has once again fallen below the 20-day and 50-day SMA, and the TD upward track has also been lost, showing a short-term downward signal. A strong rebound is necessary in the next two days to rise above the 20-day SMA; otherwise, it will lay the groundwork for a medium-term adjustment.

The medium-term decline target is $3,225

As there will be several important data releases in the US this week, especially the employment data, it is necessary to pay attention. As I pointed out earlier, if the data is inaccurate, the chance of the Federal Reserve cutting interest rates will increase. However, this is actually beneficial for funds to continue flowing into the stock market, which is unfavorable for gold prices. From the four-hour chart, it can be observed that the gold price has broken through the upward track since June 28th and disrupted the pattern of one wave higher than the other. The short-term rebound of the gold price should be regarded as an opportunity to escape from short positions. The support at $3,320 turns into resistance, and further upward movement is expected to be restricted at $3,340. The medium-term downward target is $3,225.