On Monday, July 20th, spot gold experienced a day of decline followed by a recovery. The price hit a low of $3,990.67 per ounce at 07:15, before climbing to a high of $4,028.69. This movement was not an isolated incident but a direct reflection of the escalating conflict between the United States and Iran over the weekend. Despite its traditional role as a safe-haven asset, gold is showing clear signs of pressure under the dual squeeze of geopolitical risks and macroeconomic policies.
Over the past weekend, the conflict continued to deteriorate. Iran launched an attack on a US military base in Jordan, resulting in the deaths of two American soldiers and injuries to several others. This was followed by a new round of retaliatory actions from both sides. The so-called "fragile peace agreement" previously championed by former President Trump has now been largely abandoned by both the United States and Iran.
Technical Analysis of Gold
From a daily chart perspective, the gold price is firmly suppressed below the short-term moving averages, which are arranged in a bearish pattern. The 14-day RSI is situated in the bearish zone below 40. The MACD fast and slow lines are converging and on the verge of forming a death cross, with the red momentum bars contracting towards the zero line, hinting at a potential acceleration of the downtrend.
On the 4-hour chart, the price action leans towards a weak consolidation. The RSI indicator is in a neutral-to-weak zone, indicating that buying power has not yet recovered significantly. The short-term momentum on the MACD has weakened somewhat, suggesting insufficient upward driving force. Overall, the intraday trading strategy for gold is recommended to be approached with a bias towards weakness and consolidation.
Gold Trading Strategy
Sell Strategy: Consider selling in the range of 4032-4034, with a stop-loss at 4056, targeting around 3990.
Buy Strategy: Consider buying in the range of 4000-3998, with a stop-loss at 3979, targeting around 4032.
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