Spot gold opened the week of August 10 at $4,346 per ounce, surging to a two-month high around $4,450 during the midweek before a sharp profit-taking selloff on Thursday sent prices tumbling 1.3%. The decline continued on Friday, with gold briefly retracing to a weekly low near $4,310.
Just as bears appeared to be gaining control, a surprise miss in U.S. retail sales data abruptly reversed the trend. Gold staged a textbook V-shaped recovery, closing the week at $4,375.80, up approximately 0.8% from the open. The intraweek volatility exceeded 140 points, with gold forming a bullish weekly candlestick featuring a long lower shadow, signaling resilience among buyers.
This price action was driven by cooling U.S. economic data, shifting expectations for Federal Reserve interest rate cuts, and escalating geopolitical tensions in the Middle East. Market sentiment is now decidedly bullish, though the outlook remains highly dependent on changes in Fed rate expectations. This week, traders will focus on the release of the Federal Reserve meeting minutes.
From a technical perspective, the two-cycle analysis shows gold is trading in a broadly bullish but volatile manner, with a steady upward bias. On the daily chart, prices are holding above the middle Bollinger Band, stabilizing above short-term moving averages, and limiting downside momentum. Recurring long lower shadows on the daily candles indicate solid support in the $4,310 region, suggesting the current pullback is part of a healthy consolidation phase within an uptrend, with no signs of a bearish reversal.
On the 4-hour chart, volatility is narrowing, and the Bollinger Bands are contracting, signaling an impending breakout. Gold is forming a series of higher lows, creating a stair-step bullish structure. Momentum remains positive, with repeated dips and recoveries reinforcing the pattern. The recommended strategy is to maintain a core buying approach, focusing on support near $4,310, while avoiding chasing prices at highs. Given that the $4,450 resistance remains unbroken, patience is required for a breakout to confirm the continuation of the uptrend.
For short-term trading, the recommended range is $4,430 to $4,340, with a strategy of buying on dips and selling on rallies. This content is for reference only and does not constitute investment advice. Investors should act at their own risk.
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