The precious metal experienced a session of volatility on Tuesday, initially rising on buying momentum before retreating. Geopolitical tensions in the Middle East, including a U.S. military helicopter opening fire on a cargo vessel heading to Iran, forcing it to stop, and Iran's Supreme National Security Council reiterating that the Strait of Hormuz would not reopen unless the U.S. accepts its conditions, weighed on the price. This led to a bearish closing pattern below the 100-day moving average, and with a bearish cross forming, the short-term outlook points to a correction, potentially revisiting the $4,230 or even $4,130 levels, or lower.
Resistance is now eyed at the 100-day or 200-day moving averages, offering selling opportunities on rallies. The intraday high reached $4,434.80 before meeting resistance and falling continuously, hitting a session low of $4,356.45 during early European trading. Prices then stabilized and recovered, but after the U.S. market open, they faced selling pressure above $4,400, leading to another decline. The session closed at $4,368.07, with a daily range of $78.35, a loss of $22.18, or 0.51%.
Where to focus today
Looking ahead to Wednesday, gold opened with a weaker bias, pressured by the previous day's retreat and the moving average resistance. Additionally, the recent rebound in crude oil prices, coupled with a firmer U.S. dollar index, has limited bullish momentum and exerted pressure on the metal. Consequently, gold is expected to encounter resistance near the 100-day moving average and undergo a corrective pullback. The focus today will be on the U.S. July CPI data, both headline and core. Market expectations are mixed, which could lead to choppy trading. However, as long as the current geopolitical tensions and the Strait of Hormuz blockade remain unresolved, gold will face headwinds from rising oil prices fueling inflation and the subsequent pressure for a potential Federal Reserve rate hike. Therefore, the near-term outlook suggests gold will trade in a high-range consolidation pattern before eventually breaking lower.
Weekly chart insights
On the weekly chart, gold’s strong rally last week, fueled by sustained upward momentum from the rising trendline support, has pushed it above the 5-, 10-, and 60-week moving average resistance. The MACD indicator shows a continued reduction in bearish momentum, while the KDJ has formed a bullish crossover, suggesting the potential for further gains toward the $4,500 or $4,700 levels. However, the price is now facing resistance from the Bollinger Band midline, the 30-week moving average, and the upward trend channel. This highlights the risk of a pullback from these resistance levels. There is a possibility of a renewed decline and correction, but from a longer-term perspective, the 60-week and 100-week moving averages present attractive buying opportunities on any dips.
Daily chart dynamics
On the daily chart, gold has once again consolidated and rallied above the rising trendline, but the 100-day moving average has formed a bearish crossover with the 200-day moving average, creating a bearish outlook. The price is currently showing signs of rejection at this resistance zone. Unless the metal can close above the $4,500 level on a sustained basis, the immediate focus remains on the 100-day moving average resistance, which should be viewed as a selling opportunity. The following are key intraday support and resistance levels for reference. For precise entry and exit points, please refer to real-time signals.
Gold: Support is seen near $4,330 and $4,240; resistance is at $4,395 and $4,420. Silver: Support is near $64.10 and $62.90; resistance is at $65.70 and $66.60.
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