The gold market is currently in a typical technical correction phase, compounded by the market's wait-and-see attitude ahead of major economic data. The overall trend has shifted from a previous unilateral rally to a high-range consolidation and accumulation pattern. After yesterday's standard spike-and-drop shakeout, which effectively flushed out high-level floating profit positions, today's session has seen prices recover on the back of strong lower-level support. The short-term trend remains biased toward a bullish oscillation. However, the market's full focus is now on the upcoming US July CPI inflation data, with the results set to directly determine gold's near-term directional trend, likely marking the most significant turning point for the week.
Review of the Past Two Days: After consecutive highs and shakeouts, the market has been building a low-level base through repeated consolidation, with the bullish structure remaining intact. On August 12, the market continued the previous strong bullish momentum, pushing higher from the morning open at 4388 to quickly test the 4435 resistance level. Bullish momentum then rapidly faded as high-level profit-taking emerged, triggering a sharp sell-off. Prices not only erased all of the day's gains but also broke below the intraday support level of 4388, driven by short-term bearish pressure, before finally finding a bottom at 4356. During the US session, the market entered a cautious, data-driven wait-and-see mode, with trading activity subdued. Gold prices fluctuated in a narrow range between 4365 and 4415, completing a high-level position swap. This shakeout was clearly a consolidation move, not a trend reversal. Entering today's early session, market sentiment has warmed again, with prices staging a strong rebound from the 4362 low, breaking through the 4400 resistance level that capped yesterday's US session. Before the official release of the CPI data this evening, the market is maintaining a bullish bias, with short-term bulls firmly in control and the low-level support repeatedly validated.
Technical Structure Analysis: Key support levels have been repeatedly tested, allowing the short-term bullish momentum to persist. From a technical perspective, the boundary between short-term bullish and bearish forces is very clear. The 4362-4365 range has become the absolute core support level in recent days, having been tested and bounced from multiple times over several trading sessions—more than five signals of support have emerged. Combined with the 4370 level from the previous rally, this range is the "lifeline" for short-term gold bulls. As long as this support is not effectively broken, the overall bullish structure will not change. The short-term bullish momentum is currently strong. After the rebound from 4362, prices faced minor resistance near 4415. A midday pullback only dipped to 4395 before stabilizing again, indicating shallow corrections and strong buying pressure. At the same time, resistance levels are clear: 4415 is the first intraday resistance, with 4430-4435 remaining a strong, phased resistance zone—the same core area that halted the previous rally. Notably, dynamic support has shifted upward alongside the price recovery. If prices can effectively hold above 4415, the core short-term support will move from the original 4375-4380 range to 4395-4403, with the overall consolidation center of gravity rising, further consolidating the bulls' advantage.
Core Fundamental Analysis: The CPI data will set the short-term trend, with rate hike expectations entering a critical point of conflict. The market's expectations for the Federal Reserve's September rate decision are now evenly split, with all uncertainty focused on the inflation data. The previous non-farm payrolls data came in significantly weaker, signaling an economic slowdown and fueling expectations of a rate cut. This directly boosted gold prices, driving a strong rally and laying the bullish foundation for the current high-level consolidation. The US July CPI data, to be released this evening, is the key to the short-term trend. The market expects the CPI to be 3.4% year-on-year, compared to the previous reading of 3.5%. The difference in the data will directly alter short-term monetary policy expectations. First, if inflation cools (data below 3.4%), ongoing disinflation would significantly ease pressure on the Fed to hike rates, reigniting rate-cut expectations. This would provide strong fundamental support for gold bulls, allowing a break above the 4435 resistance and opening the door to a run towards the 4480-4500 high range. Second, if inflation is sticky (data above 3.5%), a rebound in inflation would restart expectations for tighter Fed monetary policy, marking a temporary top for the recent rally. Gold prices would then undergo a deep technical correction. Initial declines would be aimed at the 4380-4365 range. If the bearish pressure intensifies, a break below the core support of 4362 would accelerate the decline towards the 4320-4330 low range.
Actionable Trading Strategies for the Data: Combining the technical range structure with fundamental risk points, the near-term strategy is to focus on buying on dips while taking short positions at highs. Before the data release, trade cautiously within the range. After the data, follow the trend. For a conservative long position, on the first pullback to the 4375-4380 core support zone, take a long position with a stop loss below the 4362 low, targeting a break above the 4400-4415 range. For a speculative short position, if the market rallies directly without a deep pullback, breaking above 4415, and then hits the 4430-4435 resistance zone for the first time before the US session, consider a light short position, betting on a technical pullback, with a quick in-and-out approach. For a trend-following trade after the data, if the CPI is positive (below expectations), once the price breaks above the 4435 resistance, follow the trend and go long, targeting the 4470-4490 high range. If the CPI is bearish (above expectations), causing a sharp sell-off, follow the trend and go short. If the price breaks below 4362, add to the short position, targeting the 4330-4320 deep correction zone.
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