Gold market analysis

"Gold Price Short-Term Top to Be Seen Entering Wave 4" 5/8 10:12 am Completed

As the saying goes, "Good fortune does not come twice, and misfortune never comes alone." After the US dollar exchange rate was hit by the deviated July non-farm payroll report last Friday, it was further affected by the June factory orders last night. Data showed that new orders for US manufacturing decreased by 4.8% month-on-month in June, far worse than the revised increase of 8.3% in May. It was the second month of decline in the past three months, and the decline was the largest since April 2020. 

However, after a significant increase in factory orders in May and June, they dropped sharply, apparently due to the impact of Trump's announcement of imposing extremely high reciprocal tariffs. It is believed that enterprises were worried about a substantial increase in import costs, so they placed a large number of orders in May, compressing the order demand for the coming period into May. This naturally led to a substantial decrease in orders in June. 

Break through $3,385 or form a double top 

Of course, the financial market is bound to reflect good or bad news or data in advance. Therefore, the gold price had already risen to the level of $3,385.44 last night before the data was released. After the actual decline was close to the expected level, the gold price quickly fell back but stabilized at the $3,370 level and then rose again. From the hourly chart, the current gold price may be in the third wave of the upward trend that began last Wednesday, and it has exceeded the usual target of 1.618 times the first wave, which is $3,357.24. The next target is 2.618 times the first wave, which is $3,403.9. Assuming that the gold price reaches $3,403.9 and then enters the fourth wave, the decline targets would be $3,374.45 or $3,356.73. If $3,385.44 is the top of the third wave, the correction targets would be $3,360.97 or $3,345.83, respectively, and then the fifth wave would start. 

On the other hand, investors should note that the gold price is expected to reach a short-term peak today. If it breaks through the high of yesterday at $3,385, a small double top may form. Investors should pay attention to the bearish signal of the candlestick chart on the hourly chart. From the daily chart, the gold price has risen above the 20-day and 50-day SMAs, but the two moving averages are trending sideways and have no predictive value. The more optimistic prediction is that the gold price will continue to range between $3,245 and $3,500. 

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

MTF Special Analyst Zheng Guangfu