Gold market analysis

Gold prices are expected to rebound strongly within the day. 20/8/2025 10:08 Finalized. 

Gold prices closed with a bearish engulfing candle on two of the past four trading days. Such a strong reversal signal appearing twice in such a short period indicates that the short-term trend remains weak. Assuming that the current downtrend, which began on August 8th, has the same magnitude as the decline from July 23rd to 30th, gold prices are likely to fall to around $3,237.89 before a strong rebound. Of course, gold prices could continue to decline, with potential declines reaching 1.382, 1.5, and 1.618 times the Fibonacci extension, or even greater multiples. However, based on my experience, a decline of the same magnitude is sufficient to trigger a strong rebound. Therefore, I temporarily set $3,238 as the medium-term target for gold prices to fall to. 

Powell May Be the Driving Force Behind the Gold Price Rebound 

As for the short-term trend, from the hourly chart, it is clear that gold prices have formed a downward trend. However, investors should note that there is a possibility of a strong rebound in gold prices today. If one were to link it to event factors, it is likely to be the minutes of the Federal Reserve's interest rate meeting released tonight, which may reflect that many FOMC decision-makers support rate cuts or are open to rate cuts in September. This will make investors more optimistic that Powell will deliver dovish monetary policy remarks at the three-day Jackson Hole central bank symposium starting tomorrow. 

$3,300 serves as a significant psychological support. 

From the four-hour chart, gold prices have been continuously falling since reaching a high of $3,345 during the European midday session yesterday. Measured by the Fibonacci extension line from the movement since August 8th, the ultimate target for the decline is a 100% drop to around $3,238. However, $3,300 is also a significant psychological support level. After hitting a low of $3,311.62 in the Asian session this morning, gold prices have slightly stabilized. Investors should note that if gold prices close with a bullish candlestick pattern of a piercing line on the hourly chart, the low may have been formed. The first target for a rebound within the day would be $3,350. If Powell delivers dovish remarks as expected, gold prices are likely to gradually test higher levels over the next two trading days, with the next upward targets being $3,360 and $3,370. 

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

MTF Special Analyst Zheng Guangfu