On June 4th, gold prices remained subdued following a decline in the previous session. On Wednesday, June 3rd, international gold prices retreated, encountering resistance and closing lower due to a combination of factors. These included a deadlock in US-Iran negotiations, new conflicts in the Gulf region, and stronger-than-expected ADP employment data, which dampened market expectations for a Federal Reserve rate cut this year. Concurrent strength in crude oil and the US dollar index further pressured the precious metal. The price retested the support of the 200-day moving average, with the overall trend remaining weak. However, on a fundamental level, there is no sustained bearish pressure at present. Therefore, the price action is expected to be primarily range-bound, with the focus on the 200-day moving average support and the lower trend channel support for potential bullish rebounds. Resistance will be monitored at the 30-day and 60-day moving averages for potential bearish pullbacks.
In terms of specific price action, gold opened the Asian session at $4490.82 per ounce, reaching an intraday high of $4496.46 before encountering resistance and retreating. The price continued to fluctuate lower throughout the day, extending losses into the early US session where it recorded an intraday low of $4426.52. Although a rebound ensued, the price ultimately closed weaker at $4434.29. The daily range was $69.94, with a closing loss of $56.53, representing a decline of 1.26%.
Looking ahead to Thursday, June 4th, international gold opened with a stabilizing rebound, supported by buying interest at the 200-day moving average. This was further aided by news that the US House of Representatives passed a resolution to limit presidential authority for military action against Iran, coupled with statements from the US administration that negotiations with Iran were progressing "very smoothly" and a potential agreement could be reached this weekend. Iranian media also outlined a four-stage plan for a deal with the US, which alleviated some market pressure.
Nevertheless, given the inherent instability and fluidity of messages from both the US and Iran, gold prices are expected to maintain a consolidative and corrective bias until a substantive agreement is actually reached.
Key Data to Watch
The market will focus on data releases today, including the US Initial Jobless Claims for the week ending May 30th. Based on yesterday's ADP report and market expectations, this data is likely to exert bearish pressure on gold. Consequently, the intraday trading strategy involves looking for an initial bullish rebound followed by a bearish pullback.
Technical Analysis Overview
On the weekly chart, gold prices rebounded last week as anticipated after touching the support of the rising trendline, showing some bullish momentum. However, this week's price action failed to extend that rebound, and the price remains below the 30-week moving average and the middle Bollinger Band, indicating that bears still hold the advantage. Therefore, until the price can reclaim and stabilize above the middle Bollinger Band, there remains an expectation for further weakness, with potential downside targets near the 60-week moving average around $4100 or the 100-week moving average support (currently around $3600). This corresponds to a target for Shanghai gold around the 800 level. However, if the price rebounds back above the middle Bollinger Band or consolidates consistently above $4300, it could strengthen the case for a bottoming formation and improve the bullish outlook.
On the daily chart, the gold price remains within the descending trend channel established from the $4990 high, indicating a weak trend outlook. Until this trend channel is broken, the expectation is for continued range-bound consolidation and corrective action, allowing for short-term trading on both sides.
Support remains a key focus at the 200-day moving average and the lower trend channel line for potential bullish rebounds. Resistance will be monitored at the channel's upper boundary and the moving averages within the channel for potential bearish moves.
Intraday Trading Levels
The following are preliminary reference points for intraday operations. Specific entry and exit points should be confirmed with real-time account guidance.
Gold: Support is watched near $4420 or $4380; resistance is watched near $4480 or $4525.
Silver: Support is watched near $72.00 or $71.40; resistance is watched near $75.00 or $76.45.
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