Gold prices jumped sharply at the start of Asian trading on Monday, July 27. According to analysis, the price increase was driven by a weekend pause in hostilities between the US and Iran, which alleviated concerns over oil supply disruptions and reduced inflation risks.
This halt directly eased worries about potential disruptions to supply routes through the Strait of Hormuz. The subsequent drop in oil prices not only tempered inflation fears but also lessened the pressure on the Federal Reserve to raise interest rates. As a result, the US dollar index opened lower and declined by 0.23% to 101.22.
Gold, as a traditional safe-haven asset, rebounded swiftly due to the dual boost of falling oil prices and a temporary easing of geopolitical tensions, reclaiming the $4,050 mark. From a daily chart perspective, bullish momentum has somewhat recovered, although several indicators remain in negative territory. In the short term, the market is expected to trade with a bullish bias within a range.
On the 4-hour chart, the MACD indicator shows a gradual recovery in upward momentum, while the RSI remains in a relatively strong zone, indicating an improvement in short-term market sentiment. However, as the price approaches a previous resistance area, some profit-taking may increase. Overall, the recommended strategy for gold trading is to adopt a wide-range approach.
Gold Trading Strategy:
Long Strategy: Buy at 4087-4085, with a stop loss at 4079, targeting around 4024.
Short Strategy: Sell at 4124-4126, with a stop loss at 4045, targeting around 4092.
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