The gold market's activity on Monday, July 7th, was characterized by relatively subdued overall volatility, which largely aligned with our prior analysis. After the initial dip to the $4,144 level, the price rebounded swiftly, gaining over $20. However, the subsequent upward move met resistance, and gold relinquished the $4,144 level. The first dip presented an opportunity for a short-term long position, but the second decline breaking below the initial low signaled that bearish momentum was beginning to exert its influence. We emphasized following through with rebound short positions to target a continued downward move. The breach of the low during the European afternoon session established the overall weak tone for gold's performance during the US trading session.
Nonetheless, regarding the outlook, we maintain a relatively bullish perspective. Previously, we analyzed the potential double-bottom pattern on the 4-hour chart. Following the break above the neckline, the market structure remains strong as long as the gold price does not decisively fall below the crucial $4,100 threshold. The overall pattern is still expected to maintain a rhythm of fluctuating upward movement.
Examining the current price action, the overnight rebound's high point was around $4,068, which is near the high point of the initial rebound following yesterday afternoon's pullback to $4,144. This morning, gold opened near $4,168 and has since experienced a continuous decline, with the price currently trading around $4,126. The decline has shown little to no intervening rebound strength. Attention now turns to the outcome at the $4,100 integer level. A breach below this point would likely lead to further declines, while holding above it would present an opportunity to enter long positions. For operational reference, consider short-term long positions above $4,100, with a stop-loss below this level, targeting gains of $30 or more. For rebound scenarios, consider short positions with a defensive line at $4,168.
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