Gold prices faced downward pressure on Tuesday, June 9th, as the uncertain prospects for a ceasefire in the Middle East, with both sides maintaining a hardline stance and continuing hostilities, outweighed earlier supportive comments from former U.S. President Trump regarding potential U.S.-Iran negotiations. This, combined with technical selling pressure, led to a decline, with the price closing lower and establishing a fresh recent low. The close below the descending channel reinforced bearish momentum, suggesting potential for further declines towards the $4100 per ounce level and possibly lower.
In terms of price action, gold opened the Asian session at $4331.21 per ounce, trading in a narrow range before a brief rally during the U.S. session saw it reach an intraday high of $4362.98. The price then encountered resistance and reversed sharply, accelerating its decline to touch a low of $4236.85 around midnight. It subsequently stabilized somewhat, closing the session at $4259.11. The day's range was $126.13, resulting in a net loss of $72.1, or 1.67%.
Looking ahead to Wednesday, June 10th, gold opened with a weaker bias, pressured by bearish fundamental expectations and a deteriorating technical picture. While a short-term technical rebound is possible, any such move is viewed as a corrective pullback within a broader downtrend, with the overall outlook remaining bearish.
Market attention today turns to U.S. CPI data, with expectations for a higher reading likely to fuel inflation concerns and reinforce expectations for interest rate hikes, a negative for non-yielding gold. The U.S. dollar's recent strength adds further pressure. A robust labor market in recent months has removed the rationale for Federal Reserve rate cuts, leading several major banks to reverse their forecasts and begin pricing in rate hikes for the second half of the year. The Fed's hawkish policy expectations continue to weigh on gold. Additionally, physical gold purchases by central banks and inflows into gold ETFs have shown signs of moderating. Consequently, the trading bias remains towards selling on rallies.
From a technical perspective, on the monthly chart, the price is now trading below both the 5 and 10-month moving averages and below its prior uptrend line. Oscillators like the KD indicator maintain a bearish signal, while the MACD is poised for a bearish crossover, increasing downside pressure. This suggests potential for a decline towards the monthly Bollinger Band middle support near $3800, or even the 30-month moving average support around $3300. A monthly close above $4450 would weaken the bearish outlook, potentially leading to a period of consolidation or a renewed upward move. Otherwise, the market awaits a test of lower targets.
On the weekly chart, the price has broken below the support of its previous rising channel again, strengthening bearish forces. A short-term test of support at the 60-week moving average and the prior low near the $4100 level is anticipated. The former trendline support now acts as resistance, and selling on rallies below this level is favored. A sustained move back above this resistance would shift the bias towards a rebound.
On the daily chart, yesterday's rebound failed to reclaim ground inside the descending channel, and the subsequent decline erased Monday's recovery, intensifying bearish momentum. This points to a continuation of the downtrend, with potential targets at the $4100 and $3900 levels, where a more significant technical bounce might be anticipated. Although yesterday's session ended off its lows, indicating some rebound potential, the price remains below key moving averages like the 200-day, suggesting any recovery will be limited. A bearish crossover between the 60-day and 100-day moving averages also signals the risk of a break below the $4100 support. Therefore, the overall expectation remains for a weak, downward-adjusting market.
Intraday trading guidance will be provided based on real-time market developments.
Preliminary reference points for intraday trading are as follows (specific entry and exit points are subject to real-time instructions):
Gold: Resistance is noted near $4265 or $4300; support is seen near $4180 or $4100.
Silver: Resistance is noted near $65.50 or $67.00; support is seen near $64.00 or $60.90.
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