I. Core Viewpoint
Gold has entered a period of high-level volatility after reaching a new all-time high. The bullish trend remains intact, but it faces a dual challenge in the short term from technical corrections and fundamental events (US inflation data). Market sentiment has become cautious, and trading strategies should prioritize a cautious bullish outlook and be wary of pullbacks.
II. News Analysis:
Reasons for the Roller Coaster Market:
Record-breaking Momentum: Revised US employment data, worse than expected, reinforced market expectations that the Federal Reserve may slow its tightening pace, which was the core driver of gold’s new highs.
Profit-taking Pressure: After gold prices continued to rise and hit new all-time highs, a large number of long positions were liquidated at high levels, which was the main reason for the rapid price decline. This is a healthy technical correction, not a trend reversal.
The rebound in the US dollar and US Treasuries: The US dollar index rebounded from a seven-week low, and US Treasury yields rose from a five-month low. This increased the opportunity cost of holding non-interest-bearing gold, exerting short-term pressure on gold prices.
Future Focus: US CPI Data:
This week’s focus: All eyes are on the upcoming release of the US August CPI (Consumer Price Index) and PPI (Producer Price Index) data. These data are the most important reference indicators before the Federal Reserve’s September interest rate decision.
III. In-depth Technical Analysis
Trend Positioning: The daily bullish trend is undeniable. The market closed with a big bullish candlestick last week and continued to be strong at the beginning of this week. All moving average systems are in a bullish arrangement, providing support for prices.
Key Level Analysis:
Upper Resistance:
Short-term Resistance: 3645-3655 (Yesterday’s high conversion and psychological barrier)
Core Resistance: 3665-3680 (historical high area)
Ultimate Target: 3700 (major psychological and technical barrier)
Lower Support:
First Support: 3630-3628 (top of yesterday’s Asia-Europe trading range, turning into a watershed for intraday strength and weakness)
Second Support: 3610-3600 (psychological barrier and concentrated trading area)
Bull Lifeline: 3580 (last wave starting point & 4-hour top and bottom conversion level). If it falls below this level, it means that this round of strong rise may come to an end, and the market will enter a deeper adjustment or turn bearish.
Trading Strategy and Thinking:
Long Strategy (Buy Low):
Aggressive Buy: When the 3630-3628 support area stabilizes (e.g., a bullish candlestick pattern appears), try a small buy position with a stop-loss below 3620, targeting 3645-3655.
Steady long buy: wait for a pullback to the key support area of 3610-3600 or even 3580 before placing long orders in batches, with the stop loss set below 3570 and the target to return to above 3630. Short-selling strategy (selling at high levels):
Blindly chasing high prices is not recommended at this time. If the price rebounds to the strong resistance area of 3645-3655, try a small short position with a stop-loss above 3665, targeting 3630-3620.
If the gold price unexpectedly falls below the key support of 3628, you can follow the trend and enter a short position, with the target at 3610-3600.
IV. Summary and Today’s Trading Recommendations
Overall Strategy: Before the release of major data, the market is likely to remain volatile at high levels. Operators should reduce their positions and set strict stop-loss orders to avoid the risk of sharp fluctuations caused by data fluctuations.
Intraday Short-Term:
Short if the market breaks through the 3645-3655 area, with a stop-loss at 3660 and a target of 3635-3625.
Long if the market retraces below the 3615-3605 area, with a stop-loss at 3598 and a target of 3625-3635.
Trend Following:
Hold the 3580 bullish support level, maintain a bullish outlook above this level, and view all pullbacks as buying opportunities.
If it effectively breaks below 3580, we will need to turn bearish or wait and see, waiting for a new direction to be chosen.
Risk Warning: The above analysis is based on current market information; trading decisions should be considered in conjunction with real-time market conditions. The key focus this week is the US CPI data. It is recommended to liquidate positions or maintain a very light position before the data is released, and then trade accordingly once the data direction becomes clear.
