On Wednesday (August 5), international gold prices surged significantly and closed higher. The rally was fueled by news that Iran and Oman are close to reaching an agreement, raising hopes for the resumption of shipping through the Strait of Hormuz. Additionally, the ADP employment report, often called "small non-farm," came in below expectations and hit a new low for the year, which pressured the US dollar lower and boosted gold prices. This led to a notable expansion in price volatility, breaking the recent consolidation range and shifting the direction to stronger.
However, the formation of a death cross between the 100-day and 200-day moving averages still suggests a risk of a pullback when encountering resistance. Therefore, the subsequent rebound should focus on the resistance levels at these moving averages. In terms of specific price action, gold opened at $4,077.75 per ounce in the Asian session and initially recorded the day's low of $4,065.44. From there, it bottomed out and rebounded, rising steadily throughout the day. The rally extended into the US session, reaching a high of $4,267.50 before encountering resistance and entering a consolidation phase. It eventually closed at $4,246.69, with a daily range of $202.06, up $168.94, or 4.14%.
Looking ahead to Thursday (August 6), international gold opened with continued strength, supported by the optimistic outlook for the Strait situation and favorable US economic and employment data. Technically, the price has broken above the recent consolidation range, indicating a shift to a stronger trend, which should maintain short-term strength. However, geopolitical risks and uncertainties surrounding the Strait remain, and the technical picture shows strong resistance levels. Consequently, unless the overall situation reverses significantly, this rebound should still be viewed as a phase, and it is important to monitor the resistance at the target levels.
On the day, market attention will turn to the US initial jobless claims for the week ending August 1, the US July global supply chain pressure index, and the US June wholesale sales month-on-month data. Based on yesterday's data release and market expectations, these figures are likely to continue providing support for gold prices. Therefore, gold is expected to maintain a bullish bias during the session, with a focus on reaching the resistance targets at the 100-day or 200-day moving averages before considering a bearish reversal.
On the weekly chart, gold has strengthened sharply this week, rebounding from the support of its upward trend line after a period of consolidation. It is currently trading above the 5- and 10-week moving averages and has broken through the 60-week moving average resistance. The MACD indicator shows weakening bearish signals, and the KDJ has formed a bullish golden cross, suggesting the potential for a continued rebound towards the $4,500 or $4,700 levels. However, this week's candlestick has not yet closed, and the daily chart has not broken its bearish outlook. Therefore, focus should be on this week's closing price and next week's price action.
On the daily chart, gold has once again consolidated above its upward trend line before strengthening. However, the 100-day moving average has formed a death cross with the 200-day moving average, indicating that this rebound is still a phase. If gold cannot break and hold above the $4,500 level, there is still a risk of a decline to new lows around $3,700. Therefore, until a new bullish buying point emerges or a key resistance level is decisively broken, the strategy should remain focused on short-term or swing trading.
For intraday operations, initial support levels are around $4,255 or $4,215, while resistance levels are near $4,330 or $4,370. For silver, support is around $61.70 or $61.15, and resistance is near $63.25 or $65.00.
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