Article by: ETO Markets

The movement of the gold market is mainly influenced by two factors: the monetary policy expectations of the Federal Reserve and geopolitical tensions in the Middle East. The release of US consumer price index data showed a continued slowdown in inflation, further strengthening market expectations that the Federal Reserve will start a rate cutting cycle at its September meeting. However, investors' expectations of a bigger rate cut were tempered by data suggesting inflation had cooled less than expected. The likely dovish stance of the Fed has provided some support for gold, but the rebound of the dollar index has curbed the upward momentum of gold to some extent. In the coming days, the focus will shift to key economic data such as retail sales and initial jobless claims. The data could provide further clues on the Fed's policy path, influencing the direction of the dollar and Treasury yields, and thus indirectly the price of gold.

From a technical point of view, the recent pullback in gold prices from near all-time highs is currently in a head-and-shoulders situation, and the volatility indicator on the daily chart continues to remain in positive territory, indicating that gold still has the potential for further gains in the short term. However, gold may face some resistance near the $…-… area, a break above which could lead to a retest of the all-time high of $…-…. In terms of lower support, if it falls below the neck line, it means that the downward trend of gold is obvious, and some appropriate selling can be carried out. Initial support for gold is at the round $… mark. Further downside support is located in the $… area near the 50-day Simple Moving Average (SMA), and a break below this support could test the $… area of the 100-day SMA. The holding of these key support levels is critical to maintaining gold's overall uptrend.