Gold markets experienced a dramatic rollercoaster ride on Tuesday, July 15th. Spot gold prices plunged to a low of $3,983 per ounce, the weakest level seen since July 1st, as bearish sentiment appeared to take hold. However, the release of the U.S. Consumer Price Index (CPI) data for June triggered a sharp reversal. Gold staged a powerful rally from the lows, surging to a high of $4,102 before settling at $4,052, marking a daily gain of 1.3%. U.S. gold futures also showed strength, with the main contract settling 1.6% higher at $4,069. This price action reflects a clash of opposing forces: weaker-than-expected inflation data cooling expectations for Federal Reserve rate hikes, while escalating U.S.-Iran tensions add heat to global energy supply and inflation outlooks. Gold, with its dual monetary and safe-haven characteristics, is positioned at the forefront of this tug-of-war.
From a technical perspective, gold experienced a brief intraday rally followed by a rapid decline, resulting in a daily candlestick with a long upper shadow, indicating overall weak momentum. The short-term spike was driven by news but lacked sustained bullish follow-through, as selling pressure emerged upon hitting key resistance levels, preventing the price from holding above short-term moving averages. The broader outlook suggests a weak, consolidating pattern with significant overhead resistance and underlying support that remains under pressure. Blindly chasing the upside is not advisable. Focus should remain on Federal Reserve policy signals and U.S. Treasury yield movements, while being alert to further downside risks. Immediate resistance is seen in the $4,100-$4,130 zone. On the 4-hour chart, the brief rally was met with selling pressure, forming a clear pattern of a failed breakout, confirming the overall weak structure. The price failed to sustain above short-term moving averages, and the rebound appears to be a temporary correction before renewed selling pressure. While there were minor fluctuations at lower levels, no clear signs of stabilization emerged, with the overall trend remaining within a weak, consolidating downtrend channel. The preferred view is to look for selling opportunities on rallies. Key support to watch is around $4,000-$3,980, with resistance near $4,070.
In summary, the recommended strategy is to consider selling on a rebound towards $4,070, with a stop-loss above $4,090, targeting a move down to $4,030-$4,000.
Comments