June 22: In the gold market last week, international gold opened higher, initially rose, then retreated, turning lower to close with a hanging man candlestick. While it showed signs of halting its decline and potential for a rebound compared to the previous week, the overall trend remained in a downward correction.
Although the first half of the week saw positive news such as the US-Iran agreement and the planned reopening of the Strait of Hormuz, which eased inflation pressures and boosted gold prices, the subsequent Federal Reserve meeting and the Chairman's hawkish remarks strengthened rate hike expectations. Additionally, renewed geopolitical risks from Israel pressured gold prices to turn lower, leaving the fundamental backdrop temporarily weak. The short-term trend will continue to focus on the support of the 60-week moving average. Holding above this level could allow for a rebound, while a break below this support would likely lead to a further retreat towards $3,900 or $3,800.
In terms of specific price action, gold opened the week over $60 higher at $4,275.60 per ounce, initially strengthening to reach the weekly high of $4,382.01 on Wednesday before encountering resistance. It then reversed lower consecutively, filling the opening gap and extending its decline to record the weekly low of $4,121.85. It eventually found some footing to close at $4,151.65. The weekly range was $260.16. Compared to the previous week's close of $4,213.70, it closed down $62.05, a decline of 1.47%.
Looking ahead to this Monday (June 22), international gold opened $6 lower at $4,145.44 per ounce and traded in a narrow range during the early Asian session. Crude oil opened notably higher, with former President Trump's renewed threats during negotiations boosting its bullish momentum. However, the US Dollar Index retreated after an initial surge, which tempered the upward momentum in oil prices and limited the downside for gold. This week's focus remains on the support from the 60-week moving average and the lower Bollinger Band. Bulls will be watching to see if the week can close in positive territory.
On the fundamental front, according to analyst Zhang Yaoxi: Recently, despite the US-Iran 14-point interim agreement extending the ceasefire by 60 days and pledging to restore transit capacity through the Strait of Hormuz, uncertainty has increased as Iran's negotiation delegation postponed its trip to Switzerland due to Israel's continued attacks in southern Lebanon. Coupled with the Federal Reserve's hawkish rhetoric, this has pressured gold prices to turn lower again.
In the short term, as rate hike expectations become more fully priced into the market, gold may continue to face adjustment pressure. Particular attention should be paid to subsequent economic data and the progress of the review by the Volcker working group. Should inflation fall slower than expected, or if Middle East geopolitical tensions ease further, gold still has room for a rebound.
The key focus then shifts to the final outcome of negotiations over nuclear and sanctions issues within the next 60 days. If a deal is reached, it would significantly weaken the inflation outlook and reduce Federal Reserve rate hike expectations, potentially propelling gold prices to strengthen and climb again by September. Conversely, failure to reach a deal would pressure gold to continue its downward adjustment.
However, the prevailing view leans towards optimism. Even if a deal on nuclear and sanctions is not reached within the next 60 days, the deadline is likely to be extended to 90 or 120 days, with an agreement ultimately expected. Furthermore, the IEA monthly report suggests that the gradual restoration of the Strait of Hormuz will lead to a significant oil surplus next year, which would also substantially ease inflationary pressures.
From a medium- to long-term perspective, gold's attributes as a safe-haven and inflation hedge have not disappeared. Trends in central bank gold purchases, geopolitical uncertainties, and potential windows for a shift in monetary policy all provide underlying support for gold.
Therefore, the period following the Federal Reserve's September policy decision or entry into the fourth quarter and year-end could serve as the next entry point for a gold price rally. Investors need to view this round of adjustment with a broader perspective, manage risks, and look for opportunities to build positions in batches during pullbacks, preparing for a potential next cycle of price increases.
Technical Analysis Overview
On the monthly chart, the upward momentum in gold has weakened again, maintaining a weak posture. The price continues to trade below the resistance of the 5- and 10-month moving averages and the rising trendline, with bears holding the advantage. This suggests the potential for further downside adjustment to test support near the middle Bollinger Band around $3,800.
On the weekly chart, gold has formed candlestick patterns suggesting a halt in the decline for two consecutive weeks, yet it remains within a downward correction trend. It faces resistance from a trendline above, while support from the 60-week moving average below remains crucial. Holding above this support could allow for a rebound; a break below it would open targets near $3,900 or $3,700.
On the daily chart, gold is currently trading below the lower Bollinger Band and short-term moving averages, with bears in control. Resistance from the moving averages above should be watched for potential selling opportunities, while support from the lower Bollinger Band below could be monitored for potential bullish rebounds.
For specific real-time trading guidance, please refer to live account information.
Preliminary Intraday Trading Levels
These are reference points for initial trading ideas. Specific entry and exit points should be confirmed via live account notifications.
Gold: Support to watch near $4,100 or $4,070; Resistance to watch near $4,185 or $4,220.
Silver: Support to watch near $63.30 or $61.90; Resistance to watch near $65.75 or $66.30.
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