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Fundamentals

During the Asian session on Monday (June 12th), spot gold narrowly oscillated lower, and it is currently trading near $1959. Without any key data or events last Friday, the USD dropped from highs, and gold oscillated at a lower area. Although the trend of each species repeated, ultimately, the USD closed near $103.5, and gold prices were near $1960. Besides, the current market attention is on the Fed rate resolution in June, as well as the U.S. CPI data. Today, bulls and bears will be more cautious, the oscillation range will be narrower.

In general, the market expects that the rate hike will suspend in June and restart in July. Under the resilient U.S. inflation, interest rates will remain high for a longer period, and the Fed rate cut is still far. Now, the market expectation of the Fed to cut interest rates at the end of the year is also not strengthened, and there is a trend of weakening. Thus, it is significant to be worried about the gold price. Meanwhile, this week's Fed rate resolution will be determined, which will cause a small retracement but not a big drop. In addition, no essential data or News is worth consideration, and no result can be concluded until the release of data. Furthermore, CPI will be released on Tuesday at 20:30 in the U.S. session, and the Fed's rate hike resolution will be released at 2:00 a.m. on Wednesday at midnight.

Today, the trading range should be $1950-$1965.

Technical Analysis

Daily chart: Gold appears to be weak, but the structural trend is horizontal, which needs the fundamentals to decide the direction. Therefore, this week's Fed interest rate hike resolution and inflation data will become the key to guiding gold's medium-term direction. Currently, the major gold trend will be stable before plunging below $1932, and a temporary direction change is impossible. So, gold is possible to surge higher as it stays above $1932 later. Secondly, the effective range is still in $1940-$1970, so gold will keep oscillating earlier this week according to this idea, without any chances for an appreciation if gold fails to cross above $1975, or it is hard to decline if gold stays above $1932. Moreover, if there is an upward breakthrough, the expected level will be $1985, and $2000, an important psychological level. Instead, a descending movement that crosses below $1932 may indicate a trend change, and gold may depreciate further in the coming sessions.

Trading recommendations: go short after the rebounds. Try to go short with small positions when gold rebounds to the resistance range in $1960-$1965, with the stop-loss setting near $1970. Additionally, the first target to take profits is $1950. Set the breakeven order partially and the secondary target at $1942.

Trading Recommendations

Trading direction: Short

Entry price: 1961

Target price: 1942

Stop loss: 1980

Support: 1950.000/1938.000

Resistance: 1970.000/1985.000