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Fundamentals

During Tuesday's (June 27th) Asian session, spot gold narrow oscillated, and it is currently trading near $1924. Recently, the concerns about Russian political turmoil drive funds into safe-haven gold. In June, the PMI data in Europe and the United States was worse than expected, which triggered recessionary fears. Both issues provide support for gold prices. In addition, the USDX continues to shock and weaken this week, offering rebound opportunities to gold shortly. However, the rebounding space for gold will be limited, with the tightening expectations of other monetary policies, gold prices may be hard to bounce.

Key data today: U.S. May Construction Permits monthly revision, U.S. May Building Permits adjusted annual rate, U.S. May Durable Goods Orders, the U.S. June Consumer Confidence Index, U.S. May New Residential Sales annualized total (quarterly adjusted) and Canadian May CPI data. Key events to watch: ECB President Lagarde's speech at the ECB's annual forum and the 14th Summer Davos Forum, to be held till June 29th.

Technical Analysis

Daily chart: Gold started and moved at highs yesterday, once reached $1933. There were several short-coverings below while the support stayed at $1920, and gold stopped at $1921 when it tried to reach the support. It confirms the support for gold at $1920, while gold still oscillated horizontally all day, and the daily pattern closed with a bearish doji star and a long-upper-shadow. Regarding the short-term gold price, there is no clear trend and the resistance of $1938 persists. If gold stands above $1938, it could appreciate slowly to $1950-$1970. Instead, if gold runs below $1938, it will test the support between $1900-$1910 after losing the support at $1920.  

Trading recommendations: Try to buy lows and sell highs but be careful of long orders. If gold climbs above $1930 today, and reaches $1938 after oscillations, it is recommended for aggressive traders to go short with small positions and set the stop-loss at $1945. In addition, try to take profits at $1930, reduce positions and place break-even orders. The secondary target should be $1920. Now, gold has been testing $1920 for numerous times without breaking it, but the support validity is unclear. If gold plunges below this line, it could probably depreciate to $1910. Therefore, traders must go long with small positions and stop-loss. It is better to go long when gold falls to $1910 with signs of stabilizing.

Trading Recommendations:

Trading direction: Short

Entry price: 1938

Target price: 1918

Stop loss: 1945

Support: 1920.000/1910.000

Resistance:1930.000/1938.000