July 14: In the previous trading session on Monday, July 13, international gold (London spot) opened lower and weakened. The escalation of geopolitical tensions, with Iran announcing the closure of the Strait of Hormuz over the weekend and the US launching consecutive strikes against Iran, boosted WTI crude oil, which opened higher with gains exceeding 3%. This increased inflation expectations and the prospect of interest rate hikes, putting pressure on gold prices. Consequently, gold experienced a significant pullback and closed lower, moving further below the middle Bollinger Band and short-term moving averages. The bearish momentum has intensified, suggesting a continued bias for weak adjustments in the short term.
On July 14, in terms of specific price action, gold opened in the Asian session with a gap down of $25 to $4,086.51 per ounce. It initially recorded an intraday high of $4,102.30 before turning lower. The price trended downward in a volatile manner throughout the session. Although there was a brief pause in the decline and a slight rebound around midday, the upward momentum was limited. After the US market opened, bearish forces regained strength, increasing downward pressure. Around 00:30, the price touched an intraday low of $3,986.27 before finally stabilizing and consolidating within a narrow range. It closed at $4,000.81. Compared to last week's closing price of $4,111.62, the daily range was $125.35, resulting in a decline of $110.81 or 2.7%.
Looking ahead to Tuesday, July 14, international gold opened with narrow fluctuations, indicating some short-term profit-taking and a potential rebound demand. However, as it remains below moving average resistance, with the US dollar index strengthening on a rebound and crude oil breaking above its 200-day moving average resistance to gain stronger bullish momentum, this will likely enhance inflation prospects and rate hike expectations, thereby pressuring gold prices. Therefore, any intraday rebound is expected to be limited. The trading strategy remains biased towards taking short positions at higher levels.
Key Data and Events to Monitor
The focus for the day will be on the release of US June CPI data; testimony by Federal Reserve Chair Warsh at a hearing; a conference attended by Fed Governor Goolsbee; speeches by Fed Governors Cook and Bowman. Market expectations are for a significant decline in CPI, which would weaken inflation and rate hike prospects and potentially boost gold prices. However, given the renewed strength in crude oil, even if the CPI meets expectations, its positive impact on gold is likely to be limited.
Furthermore, based on the recent policy shift by officials, subsequent speeches are largely expected to maintain a hawkish tone overall. In the short to medium term, gold prices are still facing adjustment pressure. Consequently, the trading strategy for the evening and the day remains biased towards shorting at higher levels.
Until the US-Iran situation is fully resolved, any rebounds in gold prices are likely to be temporary or unsustainable. In terms of trading strategy, amid unpredictable and fluctuating factors, it is advisable to focus on capturing intraday or weekly stage-specific trends for both long and short trades.
Technical Analysis Overview
On the monthly chart, gold formed a bearish candlestick in June, with sustained bearish momentum, suggesting a potential for further decline in July towards the support at the middle Bollinger Band around $3,820, or even lower. Although there has been some stabilization in the current price action, it remains under the downward pressure from June's decline and has not reclaimed the uptrend line. Therefore, before recovering the losses from June, there remains a risk expectation of turning lower again to test lows. The bias is for a potential sideways consolidation within a range of $4,500-$3,600 for several months before resuming an upward climb.
On the weekly chart, gold failed to extend the bottoming and bullish stabilization pattern seen over the previous three consecutive weeks and moved lower again, trading below the 60-week moving average. Bears hold the advantage. In the short term, there is potential to touch the trendline support around $3,920, or even the support near the 100-week moving average around $3,680. At those levels, one could consider entering long positions to seek a rebound.
On the daily chart, gold opened with a gap down and declined yesterday. The gap remains unfilled. Although there is a risk of the gap being filled, the current bearish pressure is significant. If a rebound occurs to fill the gap, it would likely present an opportunity to enter short positions for a subsequent decline. Therefore, the trading strategy remains biased towards shorting at higher levels while awaiting a test of support targets.
Intraday Trading Reference Points
The following are preliminary reference points for intraday long/short positioning. Specific entry and exit points should be based on real-time account notifications.
Gold: Monitor support around $3,980 or $3,960; monitor resistance around $4,020 or $4,050.
Silver: Monitor support around $56.75 or $55.60; monitor resistance around $58.40 or $59.15.
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