On Thursday, June 25th, during the early Asian trading session, spot gold initially saw a slight increase before turning lower, currently trading around $3980. On Wednesday (June 24th), the price of spot gold fell sharply by 2.6%, ultimately closing at $4001 per ounce after touching a low of $3959. This move not only breached the critical psychological $4000 level but also marked the lowest point in over seven months, with the daily candlestick forming a long lower-shadow bearish pattern.
Key Fundamental Drivers
Geopolitical Factors: ① Technical consultations between the US and Iran are set to continue by the end of this month. ② The United States reported that approximately 72 vessels carrying a total of 20 million barrels of oil departed the Strait of Hormuz in the past 24 hours. ③ The Israeli Defense Minister and Prime Minister reiterated a firm stance, stating they will not withdraw troops from Lebanon. ④ The Iranian Revolutionary Guard Corps Navy stated that navigation through the Strait of Hormuz must be coordinated with its forces on Channel 16, vessels violating passage instructions will face action, and new shipping routes in the Strait not coordinated with Iran are unacceptable and dangerous, emphasizing that safe passage is only possible via the routes designated by Iran.
Data and Market Movements: On Wednesday, the US Dollar Index maintained its strength, rising for a third consecutive session to a high of 101.8 before closing up 0.19% at 101.5, marking a fresh 13-month high. Oil prices fell on Wednesday, with Brent crude closing down 4.17% at $73.42 per barrel and WTI crude closing down 4.33% at $70.47, primarily due to easing supply concerns as more previously stranded tankers departed the Strait of Hormuz. US Strategic Petroleum Reserve inventories hit their lowest level since the week ending June 24, 1983, while commercial crude inventories fell for the ninth consecutive week to their lowest level since October 1984.
Other Considerations: Today's key fundamental focus will be on the US weekly initial jobless claims for the week ending June 20th and the US core PCE price index year-on-year for May, both scheduled for 20:30. A moderate inflation reading could temporarily ease rate hike expectations, while a stronger figure may continue to pressure gold prices.
Technical Analysis Perspective
From the daily chart structure, gold has currently declined to the vicinity of the key $4000 level, with a brief breach indicating an overall weak trend. There is potential for further downside in the future, although a battle around $4000 is expected. The focus will be on whether a pause in the decline and a corrective rebound can materialize over the next two days. Intraday, initial focus will be on the battle for the $4000 level, with main resistance seen near the 5-day moving average around $4090. However, a test to that level is highly unlikely. Over time, the 5-day MA will gradually decline and could potentially move down to the previous low area of $4020/25, forming a new resistance zone. On the downside, immediate attention is on the lower boundary of the daily range near $3950, which is also near the previous night's low. A pause in the decline and a moderate rebound to test resistance could occur here, but the potential for further downside remains, though this will also depend on the US Dollar's trajectory.
Looking at the 1-hour chart, after breaking below the $4000 level overnight, gold did not extend its decline significantly, but the subsequent rebound was also limited. This suggests the market views the break below $4000 as valid. Furthermore, the 20-period moving average on the hourly chart is providing short-term resistance today. Therefore, the primary intraday bias is likely to remain weak, though the space and momentum for further declines may be limited. Intraday resistance is first seen around the 20-hour MA at $4020/25, which is also the high of last night's rebound and the previous low area. Its performance will significantly impact short-term market sentiment. On the downside, initial support is seen near the lower boundary of the hourly range at $3960/50. If price action remains below $4000 for an extended period, expectations for a further downward extension will increase.
Intraday Trading Recommendations
For short positions, consider light shorting on a rebound near $4020/25, with a stop-loss set above $4040. Targets are set below $4000, where a breakeven stop-loss and partial profit-taking can be considered, with remaining positions targeting $3960/50 and potentially even $3900. For long positions, first monitor the battle around $3960/50, followed by a potential test of $3920/00. The decision to enter long positions should be adjusted based on real-time market conditions.
Comments