On August 12, spot gold surged to a session high of $4435 before encountering significant profit-taking from long positions, leading to a pullback. Currently, gold is trading in a high-level consolidation range, with short-term prices likely to test resistance levels again. Market participants are exercising caution, awaiting the release of the critical US July CPI inflation data at 8:30 PM ET.
From a fundamental perspective, last Friday's non-farm payrolls data came in well below expectations, reducing the probability of a September rate hike by the Federal Reserve, which has been the foundation for the recent rally. The market is now focused on the July CPI, with expectations for a headline CPI of 3.4% year-over-year and a core CPI of 2.5% year-over-year. A lower-than-expected inflation reading would be bullish for gold prices, while a higher-than-expected figure could drive a rebound in US Treasury yields, putting pressure on precious metals. Geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, are providing safe-haven support, and ongoing central bank gold purchases are underpinning the long-term trend.
On the daily chart, the medium- and long-term moving averages remain in a bullish ascending arrangement. The 5-day moving average has risen to $4362, providing a first-tier dynamic support level, with the key defense point for this rally sitting at $4330. The previous day's candlestick closed with a long upper wick, indicating heavy selling pressure above $4435. The daily MACD remains in a bullish crossover, but the red histogram bars are declining, suggesting that bullish momentum is entering a consolidation phase. The RSI has pulled back from overbought territory, and the current consolidation is seen as a healthy shakeout following the recent rally, with the medium-term uptrend intact.
On the 4-hour chart, the Bollinger Bands are contracting, with prices trading above the middle band. The KDJ indicator is turning higher from oversold levels, while the moving averages maintain a bullish structure, and the upward channel remains intact. The 1-hour chart shows a bullish reversal candlestick pattern, with the price recovering above the short-term moving averages. The $4385 level has shifted from resistance to short-term support.
Synthesizing the multi-timeframe analysis: the daily trend is bullish, the 4-hour chart is in a consolidation phase, and the hourly chart is showing short-term strength. The Asian session is expected to be a period of consolidation and accumulation ahead of the CPI release. Key intraday support levels are at $4362 and $4330, while short-term resistance is at $4410, with strong resistance at the session high of $4435. Before the CPI release, trading should be conducted with a risk management approach, avoiding heavy positions on the news.
Trading strategy: Buy on dips to the $4360-$4368 range, with a stop loss below $4355, targeting a first profit of $4405, and then $4430. Sell on rallies near $4405-$4410, with a stop loss above $4420, and a profit target near $4365.
For spot silver, prices rallied to a high of $66.47 before being pressured by profit-taking. Today, silver is following gold in a high-level consolidation, awaiting the US CPI data. On the daily chart, moving averages maintain a bullish arrangement, with the 5-day moving average at $64.5 providing short-term support, and a key defense level at $64.2. The previous day's candlestick closed with an upper wick, highlighting selling pressure. The daily RSI is pulling back from overbought territory, while the MACD remains in a bullish crossover, indicating the overall uptrend is intact, with the current move being a mid-trend shakeout.
On the 4-hour chart, the Bollinger Bands are contracting, with prices consolidating above the middle band, and the KDJ indicator is flattening sideways. The 1-hour chart shows alternating bullish and bearish candlesticks, with short-term moving averages converging. Short-term resistance is at $65.8, with strong resistance at the session high of $66.47.
Trading strategy: Buy on dips to the $64.3-$64.5 range, with a stop loss below $64.0, targeting $65.6-$65.8. Sell on rallies near $65.3-$65.8, with a stop loss above $66.4, and a profit target near $64.4. A break above the $66.47 high could extend the bullish trend, while an effective break below the $64.2 support level could trigger a significant pullback.
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