July 20: In the gold market last week, international gold prices encountered resistance, fell back, and closed lower, with bearish momentum increasing. However, prices eventually rebounded upon touching the support level of the upward trend line, suggesting that short-term future movements will likely remain dominated by range-bound consolidation.
In terms of influencing factors, Iran's announcement over the weekend to close the Strait of Hormuz and the continuous US strikes against Iran have escalated tensions between the US and Iran. This boosted crude oil prices to open higher and strengthen, raising inflation expectations and prospects for interest rate hikes, thereby pressuring gold prices to open lower and close down.
Subsequently, as overall US CPI data fell below expectations, with the monthly rate recording a negative value for the first time in six years and PPI also indicating cooling inflation, market expectations for imminent Fed rate hikes diminished. This weighed on the US dollar and supported a consecutive rebound and recovery in gold prices, though the gap from the opening was not fully closed. On Thursday, initial jobless claims data came in positive, and the US-Iran situation failed to ease, instead heating up somewhat, keeping oil prices at elevated rebound levels and pressuring gold prices to fall sharply again, touching the weekly low. On Friday, supported by buying interest and a sharp decline in US stocks, which enhanced its appeal, gold prices halted their decline and rebounded.
Specifically, gold prices opened the week $25 lower at $4086.51 per ounce and initially recorded the weekly high of $4102.30 before falling back and declining. Prices rebounded and recovered on Tuesday and Wednesday, but fell again on Thursday, erasing the gains. On Friday, after further declining to touch the weekly low of $3959.68, prices rebounded and closed at $4016.83. Compared to the previous week's closing price of $4111.62, the weekly range was $151.94, with a closing loss of $94.79, or a 2.3% decline.
Looking ahead to this Monday (July 20): International gold opened lower and weakened, with an opening price of $4003.21 per ounce. Continued escalation of geopolitical tensions over the weekend led to a higher opening and strength in crude oil, further boosting inflation and rate hike prospects, pressuring gold prices. This suggests short-term gold price movements still face adjustment pressure.
Intraday focus can be placed on the US Conference Board Leading Index MoM for June, with market expectations leaning towards being favorable for gold. However, the expected impact is limited. Additionally, data this week, including initial claims, services, and manufacturing, are overall expected to be negative for gold. Combined with geopolitical risks, downside risks for the week's movements remain significant. Trading strategy should still favor selling on rallies.
From a fundamental perspective, the analysis suggests that ongoing geopolitical conflicts will make it difficult for inflation concerns to subside sustainably. This will support the US dollar's strength and Fed rate hike expectations, weakening gold's safe-haven and inflation-hedge attributes, thereby pressuring gold prices. Therefore, with inflation unlikely to reverse sustainably in the short term, gold prices are expected to remain under pressure and adjust.
Subsequent focus will remain on oil price movements, further statements from Fed officials, and any signals of easing or escalation in the Middle East situation. These will all be key catalysts for a gold price rebound or continued adjustment.
From a longer-term perspective, referencing the three major bear markets in gold since 1970, prices have retraced at least 50% of their previous gains. If this pattern holds, gold prices may still have room and time for further correction. After potentially testing support near the $3600 or even $3300 levels, a more solid bottom could form, marking a starting point for the next bull market.
However, if the geopolitical situation concludes completely with a long-term ceasefire agreement and full reopening of the strait, if inflation prospects continue to weaken and rate hike expectations dissipate, gold prices could return to a bullish uptrend, and the adjustment phase could end earlier.
Nevertheless, whether waiting for further declines based on historical patterns or waiting for a fundamental reversal where negative factors are exhausted, the fundamental logic for gold from a medium to long-term perspective has not been completely broken.
Strategic gold purchases by the Chinese central bank, deepening integration between the Hong Kong and mainland gold markets, the global trend towards reserve asset diversification, and the ongoing global de-dollarization trend all provide long-term support and a solid backing for gold prices.
In the current complex geopolitical and macroeconomic environment, gold's value as an important tool for hedging against inflation, currency fluctuations, and uncertainty risks has not diminished. Gold at current levels still holds value for asset allocation and demand.
Technically, on the monthly chart, gold formed a solid bearish candle in June, with bearish momentum steady, suggesting the potential for a further decline in July towards the support of the Bollinger Band middle band around $3820, or even lower. Although there has been some stabilization recently, prices remain under the downward pressure from June's decline and have not reclaimed a position above the upward trend line. Therefore, before recovering June's losses, there remains a risk expectation of turning lower again to test lows. The outlook leans towards several months of sideways consolidation within the $4500-$3600 range before transitioning to another upward climb.
On the weekly chart, gold prices have been consolidating in recent weeks, failing to break through the resistance of the 60-week moving average. The trend is under pressure, and until it breaks and holds above this resistance, a weak consolidation bias is maintained. Support is watched near the 100-week moving average around $3650, after which a significant bullish rebound from a lower base could be anticipated.
On the daily chart, gold prices have been consistently pressured by the Bollinger Band middle band, trending lower in a consolidating manner. Although there has been a halt in decline upon touching the support of the upward trend line, forming a double-bottom support rebound, the current price action remains under pressure. The overall Bollinger Band opening is inclined downward, and prices also face strong resistance from the 60-day and 100-day moving averages above. Therefore, any rebound is still considered阶段性, with the short-to-medium-term outlook remaining weak. Intraday trading should maintain a short-term, nimble approach for both long and short positions.
The following are preliminary reference points for intraday long/short positioning. Specific entry and exit points should be based on real-time notifications from trading desks:
Gold: Support watched around $3975 or $3940; Resistance watched around $4018 or $4050.
Silver: Support watched around $55.10 or $54.50; Resistance watched around $56.50 or $56.90.
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