On July 8th, the gold market has once again entered a typical pattern of volatility driven by news flow. The previously steady recovery and rebound were completely reversed by a sudden geopolitical 'black swan' event late Tuesday. The abrupt escalation of U.S.-Iran tensions disrupted short-term market equilibrium. Combined with the imminent release of the critical Federal Reserve meeting minutes this week, the short-term rhythm of gold's price action is expected to be fully reconfigured. Subsequent battles between bulls and bears have entered a crucial decision-making window. The current overall trend is beginning to show a divergent pattern: a broader consolidation with a slightly bullish bias, but with short-term pressure leading to adjustments.
Market sentiment is currently thick with caution. Our focus should now center on three key signals from the upcoming Fed minutes: First, the Fed's stance on current U.S. inflation and whether it acknowledges a disinflationary trend. Second, its forecast for the subsequent economic trajectory and whether it perceives risks of economic weakening. Third, its forward guidance on interest rate hikes and cuts for the remainder of the year. This is the core variable that could further influence the strength of the U.S. dollar and potentially alter gold's trend once again. If the minutes adopt a hawkish tone, signaling that "high rates will be maintained for longer" or a "pause on rate cuts," it would likely further boost the dollar and continue to suppress gold's upward momentum, thereby increasing the intensity of the short-term corrective decline in gold. Conversely, if the language is dovish, mentioning easing inflationary pressures and room for future rate cuts, it is expected to further propel a rapid gold rebound, thereby repairing the current weak technical structure. It can be said that the content of tonight's minutes may directly define the short-term direction of gold for the next 1-2 weeks.
From a technical perspective, the short-term trend on the daily chart has begun to weaken. Tuesday's session closed with another large bearish candlestick, causing the price to once again break decisively below the support of the Bollinger Band's middle line. This further concluded the current phase of oscillatory rebound. Simultaneously, the key resistance zone between 4180 and 4200 has proven difficult to overcome after multiple attempts, forming a strong overhead pressure in the short term. This has led the short-term market to completely enter an adjustment cycle. If subsequent price action continues to face pressure and rebounds remain weak, the ongoing corrective phase is likely to persist strongly. The next core support below may then be observed around the 4020-4050 zone.
However, the 4-hour chart currently also limits the downside space for bears. The primary reason is that the Bollinger Bands on the 4-hour timeframe continue to contract, and price action remains confined within a standard range-bound consolidation structure. A clear, one-sided downtrend has not yet formed, meaning the technical conditions for a sustained, sharp decline are not currently in place. This implies that while gold is weak in the short term, there is always the possibility of a further rebound and technical repair. The battle between bulls and bears has not decisively tilted in favor of either side.
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