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Fundamentals

During the Asian session on Wednesday (June 19), spot gold went downside in a narrow range and is currently trading around 1976. Gold rose nearly $30 strongly last night, breaking through multiple resistance lines and hitting a record high in two months of $1984 per ounce. US retail sales data for June is weaker than market expectations, which has further reinforced the estimation that the Fed is about to end its rate hike cycle. Meanwhile, the dollar index maintained its weak trend, hovering around 15-month lows. However, the dollar has rallied this morning, allowing gold to give up some of its gains overnight. Currently, there are still some concerns about inflation, as the European Central Bank and the Bank of England are still under pressure to raise rates multiple times, which makes gold bulls wary.

Data for investors to watch today include the total annualized housing starts in the US in June, the total number of construction permits in the US in June, and EIA crude oil inventories in the US for the week ending July 14.

Technical Analysis

Trading at the daily timeframe, although yesterday's rally is in line with the trend of swing level rise, there is no ideal pullback in the short term. Despite there was also a slight correction in the previous two days, the strength of it has never reached the desired level. Moreover, the recovery seems to come in a hurry. Gold can record nearly $30 upside, stimulated by the lack of positive news yesterday, such a pace of operation is expected to surprise most investors. In the absence of fluctuations in the US dollar, the Japanese yen, as well as US Treasury yields, this is clearly the self-replenishment of gold. Although the upward trend in gold prices is still obvious, the rally yesterday was not a favorable trend. In the short term, the price surges in this way to whipsaw some investors, while gold prices have reached the expected strong resistance level. This action will not only overdraw the upside, but also makes the pace of operation out of touch with the US index and other currency pairs, increasing the risk of uncertainty in the later market, and leading to more frequent ups and downs. Therefore, investors must be highly cautious about gold in the short term and can retain bullish expectations without chasing the rise blindly.

Investors can try short positions during the day in the short term. If you want to go long, investors must wait for the gold price correction to free up some space before considering going long. Aggressive traders can still wait for the price to rebound around 1980 and then take small short positions during the day, with the stop loss set at 1985. The first target of taking a profit is to look at 1970. You should first reduce positions and move the stop loss to break even, and then look at the 1963 line with the remaining positions. In the current trading environment, those who cannot reduce positions and move the stop loss to break even should give up any participation. If the price pulls back to the 1963 line, traders can also consider a small position to test long, with the stop loss set at 1960. The first target of taking profit is to look at the 1973 line, and the remaining positions should still watching the previous high at 1984.

Trading Recommendations

Trading Direction: Short

Entry Price: 1980

Target Price: 1963

Stop Loss: 1985

Support: 1963.000/1950.000

Resistance: 1984.000/1970.000