On June 11th, our view from Wednesday was that recent U.S. economic data had strengthened market bets on Federal Reserve interest rate hikes, supporting the U.S. dollar and Treasury yields, which directly pressured gold prices. Short-term technical analysis also indicated a risk of further declines for gold. Therefore, for trading strategies, we suggested watching resistance levels at $4,200 and then $4,250, with support levels at $4,155 and then $4,100. In case of further downward pressure, the $4,000 level could be monitored.
Looking at the subsequent price action, during the European session on Wednesday, gold continued to test lower, finding temporary footing around $4,130 before the U.S. session. After the U.S. market opened, gold rebounded to $4,186 before encountering resistance and resuming its oscillating decline, closing the day at a fresh daily low of $4,067. At Thursday's open, gold extended its losses, hitting a new six-month low of $4,024. After stabilizing, it rebounded to $4,118 before meeting resistance and is currently trading around $4,092. Overall, gold's rebound near $4,200 was met with renewed selling pressure, while a tentative base formed near the key $4,000 level, largely aligning with our bearish outlook.
Wolfinance star analysts believe the consecutive pressure and new multi-month lows for gold this week are primarily due to the market's intensifying expectations for Fed rate hikes, which bolster the dollar and Treasury yields and directly weigh on the gold price. Specifically, since the outbreak of the U.S.-Iran conflict, surging energy prices have exacerbated inflationary pressures. The earlier release of U.S. April CPI data, hitting a near three-year high, largely eliminated market expectations for Fed rate cuts this year and instead fueled expectations for hikes. Last week's stronger-than-expected U.S. non-farm payrolls data, indicating labor market resilience, completely reversed market expectations for Fed cuts and further heated up rate hike expectations. Wednesday's release of U.S. May CPI data, which further set a new three-year high, prompted the market to increase bets on at least one Fed rate hike this year. The prospect of the Fed maintaining higher interest rates for longer reduces the appeal of holding non-yielding assets like gold.
On the daily chart, gold remains under pressure, having hit a new six-month low, indicating overall weakness. For downside support, focus on the intraday low of $4,052 reached after the rebound faltered, followed by the key $4,000 level. For upside resistance, watch the intraday rebound high of $4,118, a level that has been tested and rejected multiple times, followed by $4,150. The lower Bollinger Band on both the weekly and daily charts converges around this level; a break above it could alleviate short-term downward pressure. The KDJ and RSI indicators show a slight upward turn from a bearish crossover, suggesting a short-term rebound demand after the continuous decline. However, the 5-day moving average and MACD indicator maintain a bearish divergence, indicating seller dominance and a significant risk of another downward move for gold.
Gold Intraday Outlook: U.S. CPI data hitting a three-year high has strengthened market bets on Fed rate hikes, continuing to pressure gold prices. Trading strategy suggests a range-bound approach, with resistance watched at $4,118 and $4,150, and support monitored at $4,052 and $4,000.
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