During the Asian trading session on Wednesday, international spot gold encountered resistance after an initial rally, maintaining a high-level range-bound pattern. A fierce tug-of-war between bulls and bears has emerged around the $4,400 mark, as investors await the release of key U.S. inflation data to gauge the future direction of the Federal Reserve's interest rate policy. Currently, the upper resistance levels for gold prices are at $4,400-$4,408, followed by $4,421 and $4,435, while short-term support is found in the $4,362-$4,355 area.
The U.S. Labor Department is set to release the July Consumer Price Index (CPI) at 8:30 p.m. Beijing time on Wednesday. Market expectations indicate that both the headline and core CPI year-over-year figures will continue to ease, although the month-over-month rate may turn positive from a negative reading. Following the release of the July non-farm payrolls report, the market's implied probability of a Fed rate hike in September had declined. However, with the rebound in international oil prices, the probability of a September rate hike has climbed back to around 50%. Analysts suggest that the cooling labor market has reduced the urgency for the Fed to tighten, but the unemployment rate remains low, and inflation risks from energy prices and artificial intelligence investment have not fully dissipated. Compared to a single month's job data, the next two inflation reports and the policy style of Federal Reserve Chair Kevin Warsh may have a more direct impact on the Fed's September decision. The market broadly expects U.S. inflation for July to decline slightly from June. Data from Market Watch indicates that the market predicts a 0.1% month-over-month increase and a 3.4% year-over-year rise for the headline CPI in July, with core CPI expected to rise 0.2% month-over-month and 2.5% year-over-year. If the July CPI and subsequent data are roughly in line with or below expectations, the pressure for a rate hike could be further alleviated. Conversely, if inflation data proves stubborn or significantly exceeds forecasts, a "preventive rate hike" by the Fed in September could be a positive move to stabilize market expectations, potentially signaling that the worst of the tightening cycle is over after the rate hike is implemented.
Gold opened at $4,389 on Tuesday and rose to the day's high of $4,435. It then retreated to $4,408 before rebounding to $4,421. Subsequently, prices fell again to the day's low of $4,356.7, followed by a bounce to $4,404. In the final stretch of the session, gold oscillated lower to $4,360, trading in a range of $4,360-$4,375. The daily candlestick formed a bearish candle with a long upper wick, appearing at a high level, which suggests a potential for a price pullback. Daily indicators show a bullish MACD crossover with expanding volume, while the slow stochastic indicator is in overbought territory, indicating that prices remain in a high-level consolidation. Whether prices can decline in the short term depends on support at the 5-day moving average (MA5) and yesterday's low, which are at $4,356-$4,344, respectively. Only a close below the MA5 would confirm a price drop. Conversely, prices could fluctuate or even stage a strong rally to break through recent highs. On the 4-hour chart, the MACD has formed a bearish crossover with expanding volume, and the slow stochastic indicator is rapidly moving downward, indicating a potential minor decline in the short term. The 4-hour Bollinger Bands are also contracting, suggesting a narrowing range. The current 4-hour bullish candlestick, however, signals a potential short-term rebound. Support around the middle band is at $4,344-$4,352. On the hourly chart, the MACD is contracting with a bearish crossover, and the slow stochastic indicator is turning upward, suggesting a short-term bounce. The immediate resistance is at $4,385-$4,386. A firm break above this level could lead to a test of $4,400 and $4,420. The hourly chart is also showing a multi-bottom support zone around $4,360-$4,365. A more definitive decline would only occur if the price closes below the 60-period moving average and the lower band.
Comments