On August 6, gold has officially entered a bullish reversal turning point after enduring a prolonged two-month period of low-range consolidation. During this consolidation phase, while the market did not exhibit extreme single-direction bullish fundamentals, bearish momentum had been steadily weakening since gold prices fell from their annual high of $5,600. The prolonged range-bound trading effectively consumed and depleted existing bearish forces, fully preparing the market for the current bullish breakout.
After an extended tug-of-war between bulls and bears, along with repeated fundamental fluctuations, the gold market landscape has undergone a substantive shift, with the bullish trend clearly emerging. The core variables for the current market remain focused on three key dimensions: whether the Middle East geopolitical conflict can fully de-escalate, whether the trend of declining oil prices will continue, and whether the Federal Reserve's September interest rate hike will be completely abandoned. The subsequent evolution of these three variables will directly dictate the strength and pace of the current gold bull run.
From a technical perspective, gold's effective breakout above the $4,200 key level is the core turning point for this market, directly forming a bottom reversal signal at both the daily and weekly chart levels. Following this breakout, the probability of gold setting new annual lows has essentially been eliminated, with the market trend fully shifting from consolidation to a bullish phase. The short-term market is continuing its strong upward momentum, with the next core target gradually challenging the $4,350–$4,400 key resistance zone.
The core fundamental driver behind this gold price rebound stems from the marginal easing of geopolitical tensions in the Strait of Hormuz. As a critical global energy artery, the Strait of Hormuz handles nearly 30% of the world's seaborne oil trade, and its status as a key hub in the global energy supply chain has made transit rights a primary source of geopolitical risk premiums. Recent intensive negotiations between Iran and Oman, aimed at restructuring the sixty-year-old traditional transit rules and reshaping the strait's shipping landscape, are a key factor. Although the U.S. maintains a tough stance on key terms such as control rights and transit fees, adding uncertainty to the new agreement's implementation, market optimism regarding smooth strait navigation continues to rise.
Simultaneously, Iran has issued a strong counter-threat, designating regional key energy infrastructure as potential targets, leaving room for renewed geopolitical maneuvering. However, overall market sentiment has clearly improved. The rising expectations for smooth navigation have directly driven a significant drop in oil prices, cooling global inflation concerns. This has led markets to continuously lower expectations for a Fed rate hike, putting downward pressure on the U.S. dollar and Treasury yields, which in turn provides solid fundamental support for gold's strong rally.
Driven by multiple positive factors, spot gold experienced a powerful surge on Wednesday, with a single-day gain exceeding 4%, marking its largest daily increase since February. On Thursday (August 6), during early Asian trading, gold continued its strong upward momentum, gaining another 1.3% by 09:45 local time, reaching a high of $4,302, a new high since June 18, fully unleashing the bullish trend's strength.
Data further reinforces the bullish foundation. The U.S. July ADP private payrolls data came in significantly weaker than expected, adding only 44,000 jobs, far below the revised June figure of 95,000. This clear signal of a cooling labor market further weakens the case for a Fed rate hike. The market is now fully focused on Friday's crucial non-farm payrolls report to determine the Fed's future policy path. Additionally, today will see the release of U.S. weekly initial jobless claims and July Challenger job cut data. This series of employment data will provide consecutive guidance for short-term market movements, requiring close attention from investors.
Turning back to the current market, the overall environment is comprehensively favorable for gold and silver bulls. Gold and silver have officially exited their consolidation phase and entered a single-direction upward trend. The core trading logic in a single-direction market is to follow the trend, strictly avoiding subjective top-picking or counter-trend short positions. The medium-term target for this bullish cycle is clear: gold is targeting $4,500, and silver is targeting $68. The overall strategy is to hold positions following the trend, adding to them on pullbacks.
For today's short-term trading, key reference points are: the core support levels at $4,250 and $4,220. On pullbacks to these support zones, long positions can be established tactically. The short-term upside resistance is locked in at the $4,350–$4,380 zone. A first touch of this resistance range could warrant short-term profit-taking, while a trend breakout would support holding positions for the higher targets.
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