Gold:
On Wednesday, July 23rd, spot gold prices closed strongly higher, gaining 1.3% to settle at $4,129.79 per ounce, having earlier touched a two-week high of $4,165.92 during the session. August gold futures surged even more, rising 1.9% to a settlement price of $4,151.90. This upward move was fueled by a combination of a slightly weaker US dollar, technical buying, and a sharp escalation in geopolitical tensions in the Middle East, propelling gold into the spotlight. Investors are holding their breath ahead of next week's Federal Reserve interest rate decision, while inflation concerns triggered by oil prices soaring to near six-week highs have further amplified the market's risk-off sentiment.
Where to begin the analysis?
From a technical perspective, on the daily chart, the overall bullish structure remains intact, with prices holding above the support of the medium-term moving averages. The primary trend continues to lean towards strength, with any pullbacks considered merely as high-level corrections. Resistance is eyed around the $4,200 level, while support continues to be monitored near $4,030. The 4-hour chart shows particularly pronounced characteristics of consolidation. The pattern of rallying and then retreating has led to repeated adjustments in short-term indicators, with candlesticks alternating between bullish and bearish, highs slightly declining, and lows remaining largely stable. The price action is in a converging consolidation phase, with neither bullish nor bearish momentum appearing particularly strong. For the intraday session, short-term resistance is watched near $4,165, while short-term support lies in the $4,100 to $4,065 zone.
Overall strategy and conclusion
Based on the above analysis, a suggested strategy is to consider selling on a pullback to around $4,145, with a stop-loss set above $4,160, targeting a move down towards the $4,100 to $4,080 area. Alternatively, a long position could be considered if the price falls to near the $4,070 level.
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