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Fundamentals

In the Asian session on Tuesday (July 25), spot gold rebounds rapidly at lows, currently trading near 1962. Yesterday's release of U.S. data was mixed, but the PMI initial value in the euro zone missed expectations across the board. The fall of the euro boosted the dollar price and weighed on the gold price. Perhaps even if July is the month for the Fed's last interest rate hike this round, due to the resilience of inflation, the Fed will still maintain high interest rates for a long period. This is a great constraint for gold prices, and only the interest rate cut expectations can fully ignite the bull enthusiasm. Market sentiment is currently focused on the Federal Open Market Committee (FOMC) policy meeting in July this week.

As for the data, the PMI preliminary value of U.S. Markit manufacturing in July is 49, unexpectedly rebounding to a three-month high, higher than expected 46.2; the PMI preliminary value of services in July is 52.4, a record low since February this year, and the market expectation value may fall slightly from the final value of 54.4 in June to 54.0. The stickiness of price pressures is still a major problem. The PMI preliminary value of manufacturing in the euro zone in July fell to 42.7, much lower than expected, and the value in Germany fell below 40. The ECB rate hike is expected to weaken.

Today's highlights include the Germany's IFO Business Climate Index in July, the UK's CBI Industrial Orders Difference in July, the UK's CBI Business Optimism Index of Q3, and the U.S. Conference Board Consumer Confidence Index in July. Big events to watch include the release of the IMF's 2023 World Economic Outlook in July.

Technical Analysis

In the daily chart, yesterday's gold prices first fluctuated around 1960. The price rebounded during the European session, and it tested the above of 1968 and then fell again. The overall performance of the price was weak during the evening session, the price weakened again during the middle of the night, and the low point fell to 1953. The daily chart closed a bear candle. Although the current market has a falling space, the space is insufficient. There is no formation of an extremely weak state, and it is still necessary to be in fluctuation in the short term. After 4 trading days, it fell to nearly 1950, realizing the space of 35 dollars. This wave of decline may have alleviated the fear of many people about the strong bull. Now the market is stable, and today's trading rapid rebound is also confirming it. It is not recommended to overly focus on the downward space of today's gold prices. The probability is still to continue the weak tendency if there is not the engulfed state of a long white body. Therefore, the current judgment is that there still has a space below the bear. From the technical view, after 4 consecutive falls, a rebound is also needed. However, we also need to recognize that this wave of downward space is also limited. Intraday trading is still fluctuating, and it is difficult to have a sharp rise and fall of the unilateral market. As for the above situation, it is recommended to focus on the resistance of 1968; As for the below situation, it is recommended to focus on the support of 1950.

As for intraday trading, you can buy low and sell high within the range. If the price again rises to 1968-1970, you can test short with small positions. The stop loss is set at 1975, the first target of the take profit is 1960, reducing the position to move the stop loss to breakeven is 1950. If it again fell to 1945-1950 intraday, aggressive people can properly increase the position to go long in the short term. The take profit is set at 1964.

Trading Recommendations

Trading direction: Long

Entry price: 1945

Target price: 1965

Stop loss: 1940

Support: 1950.000, 1945.000

Resistance: 1970.000, 1983.000