On Wednesday, August 12, spot gold decisively broke through a key resistance level, reaching an intraday high of over 1.6% before closing up 0.93% at $4,408 per ounce. This move saw it reclaim the 100-day moving average and hit a fresh two-month high, surpassing the previous peak of $4,141.24 set on June 5, the highest level in over two months. U.S. gold futures also rose 0.6% to settle at $4,467 per ounce.
Mild U.S. inflation data emerged as the primary catalyst, prompting markets to rapidly scale back expectations for a September interest rate hike. This development increased gold's appeal as a non-yielding asset. However, ongoing tensions in the Middle East are keeping oil prices elevated, which could reignite inflation concerns and potentially support future rate hike predictions, making some bullish investors cautious. Market participants are now closely watching to see if gold has initiated a new upward cycle.
From a technical perspective, gold has completed a pullback and established a solid footing, with the scope for further short-term declines now significantly limited. The bullish trend remains dominant. The price is holding above short-term moving average support, and key support levels have been tested multiple times without breaking, forming a robust base structure. On the 4-hour chart, bullish indicators are sustained, while corrective volume continues to shrink, signaling a depletion of bearish momentum. The overall trend is one of fluctuating strength, with upward momentum being rebuilt after the correction. The chart signals are clear: the market can continue to be viewed bullishly from the current support levels, waiting for the next leg higher.
In summary, the recommended strategy is to focus on buying on dips, with shorting on rallies as a secondary approach. For intraday trading, the upper resistance at the daily Bollinger Band upper line of $4,460 is a key level to consider for short-term short positions. A break above this level could target $4,480-$4,500. On the downside, the $4,380 level is a viable entry point for long positions, with close attention to the critical support at $4,355.
Comments