July 16th: In the previous trading session on Wednesday (July 15th), international gold prices experienced a volatile session, rebounding from lows to close higher, yet remained under pressure from moving averages. Fundamentally, while the latest US CPI and PPI data collectively indicated cooling inflation, this represents only a single month's data and does not establish a trend. The recurring escalation of geopolitical tensions has once again strengthened oil prices, which is expected to continue fueling future inflation prospects and interest rate hike expectations, thereby limiting the rebound in gold prices. Consequently, short-term gold price movements are still expected to be dominated by volatile consolidation.
In terms of specific price action, gold opened the Asian session at $4053.17 per ounce, initially moving lower to record an intraday low of $4017.36 during the early European session. It then found support and rebounded. The US session opening saw a surge above $4070, boosted by a larger-than-expected drop in PPI data. Although it encountered resistance there and retraced to erase those gains, subsequent bullish comments from Trump and Vance prompted another wave of buying, pushing gold to an intraday high of $4081.24. The rally was capped again following Iran's rebuttal. The metal finally settled at $4060.40, marking an intraday range of $63.88, a gain of $7.23, or 0.18%.
Looking ahead to today, Thursday (July 16th): International gold opened with narrow fluctuations. Despite the recent halt in declines and yesterday's overall recovery suggesting some continuation potential, the price faces overhead resistance from moving averages, keeping the trend under pressure. However, the short-term outlook suggests either continued consolidation or a resumption of the rebound.
On one hand, the US Dollar Index has been declining on the daily chart for consecutive sessions, trading below its short-term moving averages. The Bollinger Bands are extending lower, and the technical indicators maintain bearish signals, indicating a weak bias. On the other hand, the upward momentum in crude oil's rebound appears to be slowing. New York Fed President John Williams, a key Fed official, stated on Wednesday that US inflation is "certainly too high," but there are signs it may have peaked and could gradually decline over the coming quarters.
Therefore, overall, pressure on gold is easing, or the environment is turning slightly favorable. In terms of trading strategy, the bias is for volatile but firm conditions, with a primary focus on buying on dips for gains, and a secondary approach of looking for selling opportunities on rallies that encounter resistance.
During the day, attention will be on data including US Initial Jobless Claims for the week ending July 11th, US Retail Sales for June, US Business Inventories for May, and the US Pending Home Sales Index for June. Market expectations for these releases are generally tilted towards being favorable for gold. Hence, there is an expectation for a rebound and a higher close in today's session.
Technical Analysis Perspective
On the weekly chart, gold has once again formed a pattern of rebounding from lows this week. However, as it remains below the 60-week moving average, this primarily suggests continued volatile consolidation ahead. A rebound above the 60-week moving average would significantly increase upward momentum, potentially targeting the $4500 area. Conversely, a break below $3900 could see prices test the $3700 level before staging another phase of bullishness. Within these boundaries, trading should initially be approached with a consolidation mindset.
On the daily chart, gold is currently in a consecutive rebound phase, with bearish pressure weakening. The Bollinger Bands are showing signs of contraction, hinting at reduced future volatility and a bias towards sideways movement. Trading should thus be based on short-term, intraday cycles for quick long and short positions. Look to sell on rallies near the middle Bollinger Band and the 30-day moving average resistance, and consider buying near the support around yesterday's low.
Key Intraday Trading Levels
The following are preliminary reference points for long and short positions. Specific entry and exit points should be determined based on real-time account notifications.
Gold: Support to watch around $4040 or $4010; Resistance to watch around $4085 or $4120.
Silver: Support to watch around $57.20 or $56.70; Resistance to watch around $58.70 or $59.35.
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