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Fundamentals

During Tuesday's (July 11th) Asian session, spot gold climbed narrowly higher, and it is currently trading at 1938. Overnight, there was not enough data, while Fed officials' comments (on Monday) about the ending of interest rate hikes continue to develop, once refreshing the USDX to a two-month low at 101.37. In addition, the USD is expected to fall for five consecutive trading days, and the U.S. bond yields are falling as well, supporting the rebound of gold. However, there will be significant U.S. CPI data later today, and market investors are more cautious, which leads to a decline in trading activity. Tonight, there will be a wave of movement, and investors need to be careful of position management.

Investors need to focus on the June inflation data released at 20:30 GMT. Economists expect the Consumer Price Index (CPI) following a 4% rise in May, will rise by 3.1%, while the core CPI is expected to fall from 5.3% to 5%.

Technical Analysis

Daily chart: Gold oscillated violently yesterday and tested the resistance at 1938 twice, but both tests were under pressure. Moreover, the retracement consolidations were stopped at 1930, closing the daily chart positively. On Tuesday, the gold rose slowly while the USD dropped slightly. The overall oscillation range was 15, although the gold crosses above 1935, there wasn't an unliteral pattern and it is difficult to rise significantly. However, gold has broken above 1935, and it is standing above the 5-day, 10-day, and 20-day SMAs. Also, it is hard for gold to plummet shortly, and the current center of the gold price pattern is getting boosted. Furthermore, the overall market sentiment has also been turned positive, but such a rise is not supported by the technical results but by the recent decline in the USD. Besides, the growth in gold prices is determined by the decline in the USD, which will also appear to be a hidden problem. If tonight's CPI data supports the rebound of the USDX, then there will be a short-term technical retracement in gold prices. But because gold has also stood above the SMAs band technically, if the retracement reappears, it will not be large. If today's CPI data drags down the USD, then the gold may surge up tremendously, and will test the resistance near 1955-1960.

Today's trading plan: During the Asian session, aggressive traders can try to go short in the near term at 1943, but must keep an extremely light position. Meanwhile, the stop-loss should be set at 1945, and fix the first target at 1933 and move the stop-loss to breakeven. The second target is to take profits at 1928. Don't chase the appreciation arbitrarily for long positions. If the evening's data is more favorable, traders can trade appropriately, and pay attention to the resistance at 1955-1960 above.

Trading Recommendation

Trading direction: Long

Entry price: 1928

Target price: 1955

Stop loss: 1920

Support: 1920.000/1912.000

Resistance: 1950.000/1960.000