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Fundamentals

During the Asian session on Wednesday (May 24), spot gold fluctuated to the upside, which is currently trading around 1973. As fears of a default on U.S. debt picked up, gold prices gained support and held on to both 1950 and 1969 support, entering a volatile phase. As a result, short-term bearish sentiment weakened significantly. However, the US data of yesterday was mixed, showing that the US economic data is still resilient. The relative strength of the US dollar still suppresses gold prices, resulting in a limited height of gold price rebound.

The minutes of the Fed meeting will be released this trading day, and traders should pay attention to it.

Overall: Janet Yellen, U.S. Treasury Secretary, sent a third letter warning to Democratic and Republican leaders in Congress on May 22 that the United States was on the verge of default. However, one-on-one negotiations between Democratic President Biden and Republican House Speaker McCarthy at the White House that day were still fruitless. The political impasse surrounding the "debt ceiling" continues, and market risk aversion heats up. Gold prices are supported, holding important support in 1950 and 1969 in the short term, and the bearish signal will weaken in the short term. However, as the debt ceiling deadline approaches, the two parties are engaged in a final game. Market volatility intensifies, as does the short-term volatility of gold prices.

The trading reference range today is 1969-2000.

Technical Analysis

In the 4-hour chart, gold has gained a foothold above the 1950 mark and regained support from the 1969 line. Since both KDJ and MACD have formed a golden cross, the bearish signal is greatly weakened, with the appearance of small "W" shaped rebound signals. In the short-term, gold is biased towards the test probe around 1985, and will even challenge the 2000 integer mark. In addition, the 61.8% retracement resistance of the 2080-1951 decline is also near this level. If this resistance can be effectively broken, the future market will be able to form a new uptrend. Further resistance will be around 2020.

Considering that gold prices failed to break through the short-term head level of 1985 in one fell swoop, it may be difficult to break through the 2000 integer mark in the short term. Until this level is broken, gold prices will continue the trend of high correction. Initial support is still at the 1969 line, and important support is around the 1950 mark. If it breaks below this level effectively, the bearish signal will be greatly strengthened in the later period, and a new round of decline may be initiated. Further strong support would require a retreat to the 1910 line.

Trading Recommendations

Trading Direction: Long

Entry Price:1965

Target Price: 2000

Stop Loss: 1935

Support: 1950.000/1910.000

Resistance: 2000.000/2030.000