The price of spot gold experienced a significant decline for the second consecutive trading day on Monday, July 13th, settling at $4000.80 per ounce, a drop of nearly 3%. During the session, it touched a low of $3986.51, its weakest level since July 1st. U.S. gold futures also moved lower, closing down 2.6% at $4005.7. This movement stands in stark contrast to the previous pattern of high-level consolidation. The core driver behind this shift is the sharp escalation of tensions in the Middle East, particularly the U.S. reinstatement of a maritime blockade on Iran. This action directly ignited concerns in the global energy market, which subsequently influenced monetary policy expectations.
The conflict in the Middle East is pushing up energy prices and expectations for interest rate hikes, which is exerting short-term pressure on gold's performance. However, it also sows the seeds for future uncertainty. Investors should pay close attention to U.S. economic data this week, statements from Federal Reserve officials, and the latest developments in the Middle East situation. This trading session will see the release of U.S. June CPI data, and Federal Reserve Chair Jerome Powell will testify before the House Financial Services Committee for the "Federal Reserve's Semi-Annual Monetary Policy Report" hearing, both of which warrant significant focus.
Technical Analysis
From a daily chart perspective, gold has entered a phase of overall weak downward movement. The price continues to be pressured below the 5-day, 10-day, and 20-day moving averages. The medium-term moving averages have turned downward, forming sustained pressure. A bearish topping pattern has formed at the highs, key support levels have been effectively broken, the Bollinger Bands are opening downward, and the price center is continuously shifting lower. Each minor rebound has been met with resistance and a subsequent pullback, indicative of a typical downtrend continuation pattern. In the short term, key resistance above is focused around 4080, while key support below lies in the 3940-3930 region.
On the 4-hour chart, a rapid decline is evident, and the market is in an extremely weak state. The price continues to trade below the short-term moving averages, which are arranged in a bearish order, creating persistent pressure. Rebound attempts lack strength, and each minor technical recovery is quickly followed by another breakdown. The Bollinger Bands are opening downward, with the price hugging the lower band, indicating a well-preserved downward channel. The MACD indicator maintains a bearish crossover, with the green histogram extending, suggesting ample bearish momentum and a lack of significant buying interest from bulls. Short-term resistance above is focused around 4030.
Trading Strategy
In summary, the recommended strategy is to consider short positions on a rebound towards the 4030 area, with a stop-loss set above 4050, targeting a move down to the 4000-3970 region.
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