On Thursday, June 4th, the Asian trading session saw London gold break out of its nearly three-day sideways consolidation, establishing a clear upward trajectory and moving beyond the previously stagnant range.
The spot price for London gold is currently quoted at $4,463.72 per ounce, representing a gain of $31.09, or 0.7%, from the previous trading day's closing price.
Market Drivers and Outlook
The gold market is currently in a pivotal phase, influenced by a combination of macroeconomic data and monetary policy expectations.
The persistent resilience of the US labor market is prompting a reassessment of the Federal Reserve's future policy path, while rising energy prices and the associated inflation risks are reinforcing expectations for higher interest rates to persist.
Against a backdrop of a strengthening US dollar and rising Treasury yields, gold is facing significant near-term pressure.
However, from a longer-term perspective, risks of a global economic slowdown, uncertainties in energy market supply, and evolving geopolitical dynamics continue to provide substantial underlying support for gold.
Key data releases in the coming weeks, including US non-farm payrolls, inflation indicators, and commentary from Federal Reserve officials, will be crucial factors influencing gold's direction.
In the short term, prices may maintain a pattern of high-level volatility, but as long as global safe-haven demand does not significantly diminish, gold's value as a medium to long-term allocation remains noteworthy.
Technical Analysis of Gold
On the daily chart for spot gold, the price action continues to follow the previously analyzed downtrend, which initiated from the two major highs at 5596 and 5419.
The key reference support level remains the phase low of 4099.
The corresponding rebound resistance levels from the earlier highs at 5026 and 4914 have not been effectively breached in subsequent moves, indicating overall market pressure.
The prevailing trading strategy, therefore, remains to favor selling into rallies, aligning with the dominant downward trend.
On the four-hour chart, the critical resistance level of 4914, which represents a rebound from the secondary high of 5419 down to 4099, has yet to be decisively broken and held.
Concurrently, the key 61.8% Fibonacci retracement support level at 4401, drawn from the prior 4099 to 4901 advance, was effectively breached last Thursday.
Although a rebound and corrective move occurred towards the end of last week, the overall weak technical structure has not changed.
The primary focus for this week's price action remains the potential momentum of a secondary decline.
With the larger-scale bearish trend established, the hourly chart analysis shows the May high of 4773 and the late-month low of 4366.
The trendline resistance for that decline, around 4618, can be considered a key pressure point ahead of this week's non-farm payrolls data release.
As anticipated, yesterday's price action broke below the weekly low of 4448.
Subsequently, today's rebound has encountered resistance near the 4470 level.
Aligning with the broader trend analysis, the recommended approach for today's session is to maintain a strategy of selling on strength.
The immediate upside resistance to watch is around 4482. As long as this level is not decisively broken, selling positions are favored.
On the downside, support is monitored at today's low of 4423. A break below this level could open the path for a further decline towards the 4390 area upon any subsequent rebound.
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