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Fundamentals

During Thursday's (June 29th) Asian session, spot gold narrow oscillated, and it is currently trading near $1904. Overnight, Powell continued his hawkish remarks, with the USD flying above 103, gold prices descended under pressure and once touched a four-month low near $1902. Recently, European and American officials have released hawkish comments, and with the existing inflationary pressure, further interest rate hikes may be necessary. These all set gold prices under pressure, and the current market expectation of the Fed raising interest rates in July reaches 81.8%, while it maintains a view that it is not likely for the monetary policy to be relaxed by the end of this year. In general, gold prices will be suffered from it, but the employment and economic problems caused by the rate hike will also be a lifesaver for gold prices. If gold can maintain it, the upper space could be enormous.

Data:  U.S. May durable goods orders rose 1.7% MoM, compared to an expected decline of 1.0%, following a 1.2% increase in April. Besides, U.S. new home sales soared 12.2% in May to a seasonally adjusted annual rate of 763,000, with the market generally expecting sales of 675,000 in May.

Key data of today: U.S. initial jobless claims for the week ending June 24th, U.S. continuing jobless claims for the week ending June 17th, final quarterly annualized U.S. real GDP for the first quarter, the monthly rate of U.S. Pending Home Sales Index for May, and Powell's speech at 14:30 BST.

Technical Analysis  

Daily chart: MACD forms a death cross and is getting wider. However, gold is still in the oversold zone, there is support for it despite the weak trend. Currently, gold is near the lower area of the descending triangle, suggesting a possible rebound demand. From yesterday's trend,  gold consolidated downward as expected after a short narrow oscillation,  and once fell to $1902.5 before Powell's speech. After the speech, the market sentiment got stable, stopping the descending gold but instead pushing it to rebound. Nonetheless, gold was under pressure again at $1913, with the daily finally closing again negatively. Moreover, gold is still weak today, and it has been oscillating near $1905 during the morning session. After declining fro three trading days, gold's resistance position is moving down, from the beginning of the week at $1930, to Wednesday at $1920. Due to an oscillating rebound on Wednesday midnight, gold failed to drop below $1900, but rebounded close to $1912. Therefore, regarding today's gold trend, the first concern will be near $1912, and today's resistance may again drop down to $1910-$1915. Considering that gold closed negatively in the past three days, although it is extremely weak, a unilateral trend could not be expected. Furthermore, today's resistance above may test the 5-day SMA ($1913), if gold can cross through the 5-day SMA, it may test further the 10-day SMA ($1925). There is tremendous space above, but if gold fails to keep above the 5-day SMA, it may extend the weakness and descend slowly, while, today's trend is determined by the European and American sessions.

Trading recommendations of today: Keep buying at lows as the main strategy. If gold plummets to $1900, try to buy in with small positions after it gets stable. Additionally, the stop-loss should be set at $1890,  the primary target to take profits will be at $1918, and the secondary target should be at $1925 after placing break-even orders.  

Trading Recommendations

Trading direction: Long

Entry price: 1900

Target price: 1918

Stop loss: 1890

Support: 1900.000/1890.000

Resistance: 1913.000/1925.000