The biggest focus in this week's gold market is Wednesday night's U.S. CPI inflation data, and this single data release has a high probability of breaking gold out of its current range-bound state.
After all, the level of subsequent inflation data will directly alter the market's expectations for Federal Reserve rate cuts, driving changes in the dollar and Treasury yields, which in turn affect the direction of gold prices.
Once CPI inflation comes in above expectations, rate-cut hopes diminish, and a stronger dollar would pressure gold; conversely, if inflation runs lower, it would favor gold rising again.
Beyond that, speeches from Federal Reserve officials will also continue to influence market bullish and bearish sentiment.
In other words, gold right now is caught in a phase where rate expectations cap the upside from above while buying support cushions the downside, leaving bulls and bears still battling each other.
Today's price action has once again slapped the faces of those who have been blindly bullish on the market.
In fact, many people easily fall into a misconception now, too readily treating a single rally as the start of a new major surge.
The reality is that the current move is merely an oversold rebound following a sharp decline, and the broader medium-term trend remains tilted toward range-bound trading.
Gold only began this round of rebound repair after previously falling to a low of 4066.
Looking at the daily chart now, the overall channel direction remains oscillating near the middle band, with medium- and long-term moving averages above still forming layer upon layer of resistance.
Although short-term indicators have shown bullish repair signals, this has not changed the large-cycle range-bound structure.
A short-term rebound does not equal a reversal, so in trading one should not blindly look only at the long side.
From the current short-cycle chart, bullish momentum has been gradually fading, and the market has once again entered a phase of choppy tug-of-war.
On the 4-hour timeframe, bulls and bears are still fighting fiercely, with 4215-4225 above remaining a zone where multiple layers of resistance converge, while 4168-4170 below is also a key short-term support.
Now from the 1-hour timeframe, the bullish-bearish oscillation is even more pronounced.
After a series of consecutive pushes higher that met resistance, the market has once again begun to pull back, causing bullish momentum to continue decaying, and gold prices still carry the possibility of further correction ahead.
Next, once the support around 4168-4165 is effectively broken, this rebound structure will be damaged once again, and gold will go on to test the prior lows of 4125-4145.
So for tonight's short-term trading levels, one can first refer to the following: 1. Since the short term has once again fallen to the key low support near 4168, one can now use this as support to go long for a move, with a stop loss at 4155, while looking above at the 4195-4205 threshold for resistance; 2. If the market later rebounds again, then first continue to watch the resistance situation around 4205-4215.
Once the market touches this area and again comes under pressure and turns lower, we can still consider shorting for another move on a short-term basis, with a stop loss at 4225 and looking below first at the 4175-4185 area, and further watching whether the 4168 support below gets broken.
This message is reprinted from a partner media outlet and is provided for the purpose of conveying more information; it does not mean endorsement of its views or confirmation of its description.
The article content is for reference only and does not constitute investment advice.
Investors who act on it do so at their own risk.
Comments