🏅 Gold Market Trend Analysis and Outlook for Next Week
1. Gold News Analysis
The July US PCE data showed that core inflation rose from 2.8% to 2.9% year-on-year, slightly exceeding market expectations. The reason why this data is important is that it is one of the inflation indicators that the Federal Reserve values most, and its performance will greatly affect the Federal Reserve’s decision at its monetary policy meeting in September. After the data was released, spot gold prices briefly rose and then continued to rise, reaching a high of $3,440 per ounce, reflecting the market’s complex interpretation of inflation data and uncertainty about future monetary policy.
Expectations of a Fed rate cut are currently the primary market driver. According to the Chicago Mercantile Exchange’s FedWatch tool, traders currently price in an 85%+ probability of a 25 basis point rate cut at the Fed’s September meeting. Historical experience shows that a low interest rate environment will reduce the opportunity cost of holding interest-free gold while putting pressure on the US dollar, which is a double benefit for gold.
Political uncertainty also provided support for gold prices. President Trump’s attempt to fire Federal Reserve Governor Tim Cook has raised market concerns about the Fed’s independence. Cook subsequently filed a lawsuit, arguing that the president had no authority to remove him from office. Such political uncertainty typically increases gold’s safe-haven appeal.
In terms of the US dollar trend, the US dollar index has continued to weaken recently, which makes gold denominated in US dollars cheaper for overseas buyers, thereby stimulating international demand. New York Fed President John Williams’s hints at a possible interest rate cut further reinforced market expectations of a weaker dollar.
2. Gold Technical Analysis
Key Support and Resistance Levels:
Key Support: The 3400-3405 area is a key support band. If it holds above this level, the bullish and volatile upward trend is likely to continue. Short-term support below is the 3410-3415 area.
Key Resistance: Short-term resistance above is initially at $3452 (the June 16 high). A strong break above this level could potentially challenge the $3500 mark.
Technical Indicator Signals:
The Relative Strength Index (RSI) suggests that buyers are gaining momentum, supporting further upward movement in gold prices.
3. Trading Strategy Recommendations
Based on the above analysis, the short-term trading strategy for gold next week should primarily focus on long positions on pullbacks, supplemented by short positions on rebounds.
Specific Trading Strategies:
Long Strategy: When gold pulls back to the 3430-3420 support area, consider buying long positions in batches (buy long), setting a stop-loss below 3418, and targeting the 3440-3450 area. A breakout could target the 3460-3470 area.
Short Strategy: When gold rebounds to the 3460-3470 resistance area, consider shorting positions (buy short), Set stop loss above 3475, and targeting the 3440-3430 area. A breakout could target the 3420-3410 area.
Risk Control:
Maintain good position management and stop-loss orders. Set stop-loss orders strictly and avoid holding onto positions.
Pay close attention to changes in market news, especially before and after the release of non-farm payroll data, as market volatility may increase.
5. Summary and Medium- to Long-Term Outlook
Overall, gold prices are likely to fluctuate first before determining a new direction next week. In the first half of the week, it will likely fluctuate primarily between 3420 and 3460, awaiting guidance from the non-farm payroll data. In the second half of the week, a breakout direction may be determined based on the data.
