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Fundamentals

During Tuesday's (July 11th) Asian session, spot gold oscillated narrowly, and it is currently trading at 1925. On Monday, Fed officials' speeches were mixed, while the overall tone was hawkish, weakening the USD and sending it to a three-week low. Comparingly, gold prices were supported and rebounded. Although gold once fell sharply to a daily low near 1912 before the U.S. session, it recovered losses swiftly and once reached its highest level at 1927. Finally, gold closed slightly with 0.02% higher at $1925/oz. Since there is insufficient data and speeches today, investors should remain cautious before the CPI data, while gold prices will maintain a narrow range of oscillation. 

Overnight news: Several Fed officials spoke in favor of continuing to raise interest rates, but also hinted that interest rates are close to the peak of the cycle. Besides, Fed's Mester said: has not yet decided whether it is necessary to raise interest rates in July, more data is needed. Fed's Bostic explained: further interest rate hikes are not necessary.

Investors must pay attention to the U.S. June CPI to be released this week. Today, the online discussion about the U.S. economy and monetary policy held by St. Louis Fed President Bullard is worths attention. 

Technical Analysis

Daily chart: Yesterday, as expected, gold tested below near 1920 and rebounded, but the momentum was not strong, and gold was suppressed by 1926. In addition, gold plummeted during the early evening session, down to 1912, followed by a rapid rebound to 1920 and oscillated. However, gold failed to break through the 20-day SMA, and the daily chart eventually closed negatively with a lower-shadow candle. Technically, there is not much change, gold maintains oscillating under the double-top at 1935, and it is difficult to appreciate until it crosses above this position. Regarding the short-term pattern, gold looks stronger, but it is limited by 1930 above, which shows that the overall upward momentum is not enough, otherwise, the rapid decline during yesterday's European session would not appear. Thus, gold will keep oscillating shortly, while investors should focus on 1935 above and 1913 below. At the same time, the center of the gold pattern is rising, which has broken through the channel. Moreover, gold also stood on the 5-day, 10-day, and 20-day SMAs, and the MACD indicators formed a golden cross at the lower level. Therefore, it is recommended to go long at lows.

Today's trading recommendations: Go long at lows, and trade quickly when trying to go short. Meanwhile, try to go long with small positions at the 5-day, 10-day, and 20-day SMAs, and set the stop-loss at 1912. To take profits, please refer to 1935, and set the remaining positions for breakeven. If gold appreciates to 1938, aggressive traders could go short with small positions in the near term, set the stop-loss at 1943 and take profits at 1925.

Trading Recommendations

Trading direction: short

Entry price: 1938

Target price: 1918

Stop loss: 1943

Support: 1912.000/1902.000