Gold prices experienced a significant decline on Thursday, July 23, dropping over 2% from a two-week high reached in the previous session. The spot price ultimately settled at $4,049.26 per ounce, while U.S. gold futures for August delivery fell approximately 2.5% to $4,050.20. This sharp reversal was driven by a confluence of factors, including escalating geopolitical tensions in the Middle East, surging oil prices that fueled inflation expectations, and heightened anticipation of a Federal Reserve rate hike in September, which propelled the U.S. dollar to a three-week high.
From a current chart perspective, gold's recent price action shows a pattern of rapid rallies followed by swift declines, indicating an overall weak market trend. The sustainability of any rebound is extremely poor, and bullish momentum is clearly exhausted, characterizing the market as a classic case of weak, volatile corrective decline. Technical indicators are weakening across multiple timeframes. On the daily chart, a high-level close with a long upper shadow candle confirms a clear bearish signal. Short-term moving averages are gradually turning downward to apply pressure, and the bullish structure is loosening. On the upside, the 4060-4080 range is a key resistance zone. On the downside, the critical support level to watch is 3940; a break below this point could open up further downside space. The weakness is even more pronounced on the 4-hour chart, where gold has repeatedly attempted rallies only to fall back, continuously creating lower swing lows. The chart shows consecutive bearish candles during the pullback, with any bounces serving only as weak corrections. The indicator's bearish crossover is still declining, with bearish momentum gradually accumulating. In the short term, the market remains within a descending resistance channel, where any bounces present opportunities to re-enter short positions. For the session today, short-term resistance is expected at 4045, with support located near 3980.
In summary, the recommended strategy is to sell short near the 4045 level, with a stop-loss set at 4060, targeting a decline to the 4000-3980 range.
This content is for reference purposes only and does not constitute investment advice. Investors who act on this information do so at their own risk.
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