On Tuesday, June 16th, during the early Asian trading session, spot gold moved sideways with limited volatility, fluctuating within a range of just $20 and trading around $4,310. With only one trading day left before the Federal Reserve's interest rate decision early Thursday, market sentiment is cautious, and it is highly likely to maintain a narrow consolidation pattern for the day. The major trend direction may only become clear after the release of the interest rate decision data. Gold opened higher yesterday and surged, reaching a peak near $4,369 before facing significant selling pressure and retreating. The daily session closed at $4,309, forming a bullish candlestick with a long upper shadow.
Key Fundamental Developments:
The risk of conflict between the US and Iran has subsided abruptly. On the US side, it will permit Iran to conduct low-level uranium enrichment. The Strait of Hormuz will be fully reopened on Friday, allowing for "freedom of navigation," and Iran's oil exports are expected to resume quickly. Notably, oil prices have fallen sharply while stock markets are rising. A memorandum of understanding includes a potential $300 billion fund for Iran's reconstruction, with details to be announced within 24 to 48 hours. On the Iranian side, Iran will be responsible for managing the safe passage of vessels through the Strait of Hormuz for a "specific period" and will charge fees for related shipping services. Iran and the US are scheduled to sign the memorandum on the 19th. The US has begun lifting its maritime blockade, with several Iranian vessels successfully passing through the previously restricted zone.
Regarding the Federal Reserve: The probability of maintaining the current interest rate in June is 98.5%, with a 1.5% chance of a cumulative 25-basis-point rate cut. For July, the probability of holding rates steady is 91.3%, with a 7.4% chance of a cumulative 25-basis-point hike and a 1.4% chance of a cumulative 25-basis-point cut. By December, the probability of keeping rates unchanged is 42.1%, with a 57.3% chance of at least a 25-basis-point increase and a 0.6% chance of a 25-basis-point decrease.
Technical Analysis Perspective:
Looking at the daily chart structure for gold, although it closed in positive territory yesterday, much of the upward space was exhausted by the gap opening, leaving its further advance looking weak. Influenced by fundamental news, a technical reversal also failed to materialize. Following the US-Iran ceasefire, the impact of the geopolitical situation on gold will be even more limited, making it harder to trigger a reversal. Consequently, market focus naturally shifts to the upcoming Federal Reserve interest rate decision. Technically, this suggests that gold may continue to digest and consolidate over the next two days. Key resistance levels to watch are the previous low around $4,370 and the 20-day moving average near $4,400. On the downside, attention should be paid to a potential retracement to fill yesterday's gap and the area around the 5-day moving average at $4,270-$4,230. The technical bias leans towards consolidation within this range over the next two days.
Examining the one-hour chart, gold opened with a gap up yesterday, consolidated, and then moved higher. Although the overall session maintained an upward bias, the pace was not aggressive. After testing resistance near $4,370 during the late session, it corrected and retreated, currently oscillating around $4,310-$4,300. On the hourly chart, the price has fallen back below the moving average band. Intraday focus will first be on the battle for the $4,330 level. If it reclaims this level, a short-term rebound may follow, with resistance anticipated near $4,360. However, if market sentiment remains relatively stable today, the likelihood of breaking above $4,330 diminishes, and the price could still move to fill yesterday's gap in the $4,270-$4,240 area.
Today's Trading Recommendations:
For short positions: If the price rebounds and tests resistance near $4,330 intraday, consider a short trade with a provisional stop-loss above $4,335. If the rebound continues and tests the $4,360 area again, another short opportunity may arise, with a stop-loss set above $4,370. The unified target for both is around $4,300 for exit, or a small portion of the position can be held with a further target in the $4,270-$4,250 zone.
For long positions: If the price retraces to the $4,245-$4,235 area intraday, consider a short-term long trade with a provisional stop-loss below $4,230, targeting around $4,300. Specific strategies should be adjusted based on real-time market conditions.
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