Gold prices moved as anticipated this morning, staging a rebound. The primary catalyst remains the weekend's news of the US and Iran once again engaging in a somewhat performative signing of a tentative 60-day negotiation agreement. This aligns with our weekend analysis, which suggested Monday would likely see an initial rebound due to the weekend's diplomatic developments. However, this morning's rally only tested the high around 4220 before beginning to fluctuate and decline once more. The extent of this morning's rebound also largely fell within the expected range outlined in our weekend analysis.
While the weekend's talks have spurred a short-term rebound in gold, the prevailing bearish momentum is not so easily exhausted. Consequently, the near-term market is likely to enter a phase of range-bound consolidation between bullish and bearish forces. Upward movement is temporarily capped below 4220, preventing a sustained rally, while downward movement finds support above 4150, preventing a continuation of the decline. Therefore, current short-term trading should primarily focus on executing both long and short positions within the 4150-4220 range.
From a technical perspective, the daily chart shows that last week's decline resulted in three consecutive bearish candles, reflecting the selling pressure. The gold price continues to struggle below the middle Bollinger Band, indicating limited bullish rebound strength. The MACD indicator shows no signs of turning upward, and various moving averages continue to extend their downward trajectories, collectively painting a picture of overall market weakness.
On the 4-hour chart, despite the morning's rebound helping the price stabilize above the lower Bollinger Band and test the middle band, the overall Bollinger Band opening remains oriented downward. Similar to the daily trend, the price action has not firmly established itself above the middle band, suggesting the bullish rebound is not particularly strong. A positive note is that this uptick has caused the 5-period moving average, the KDJ, and the MACD indicators to show tentative signs of turning upward, though the momentum remains feeble. Thus, any short-term rebound should still be viewed as a corrective move rather than a definitive shift to a bullish trend.
In summary, today's primary trading strategy should focus on selling at higher levels following rebounds. Conversely, if the price briefly touches key previous low support levels, one might cautiously consider long positions. However, these long trades should be viewed strictly as bets on a corrective rebound; it is premature to adopt an overly optimistic bullish outlook at this stage.
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