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First: Overview
The gold market is currently in a high consolidation stage. Fundamental factors vary, with geopolitical risks and expectations of tightening monetary policy from the Federal Reserve being factors. Technically, the market is looking for a clear trend after a sharp rally and pullback. The overall strategy should focus on trading within a designated range while being mindful of high volatility risks.
2: Basic driving factors
Bearish factors (putting pressure on gold prices):
Strengthening of the U.S. Dollar: The U.S. Dollar Index rose to its highest level in a week, directly suppressing the price of gold priced in U.S. dollars.
Profit-taking: After reaching all-time highs, some investors began to take profits, causing upward resistance.
Expectations of the Federal Reserve tightening monetary policy: Changes in Federal Reserve personnel have strengthened the market’s expectations for continued tightening of monetary policy, increasing the opportunity cost of holding gold.
Factors supporting gold prices:
Geopolitical risks: Escalating tensions between the United States and Iran have increased safe-haven demand for gold. However, it is worth noting that the support brought by events is often temporary, and the market re-evaluates geopolitical risk premiums.
Technical Buying: Gold prices attracted investors looking for buying opportunities after falling sharply to key support levels.
Three: Main technical level
Trend assessment: The daily chart shows consolidation at high levels, and the hourly chart shows sharp fluctuations.
Major Resistance Area: $4910 – $4930/oz. This area is a key test of the short-term rebound and will determine whether the bullish momentum is sustained (a break above the 5100 level).
Main support area: $4750 – $4730/oz. This area is the low of the recent decline and serves as a short-term line of defense for buyers. A break above support could deepen the correction.
Strong Support: 4680 – 4700 USD/oz (key area mentioned earlier).
Psychological level: $5,100/ounce. A daily close above this level is an indicator of a medium-term uptrend.
Fourth: Specific trading strategies
Main Entry: Buy near major support and sell near major resistance within a price range; if this range is broken, follow the trend.
Trade within a specific price range:
Buying on dips strategy:
Entry Area: When gold returns to the 4750-4730 support area and shows signs of stabilization (such as a bullish candle or lower shadow on the 1-hour chart).
Stop Loss: Set below 4700.
Target: Resistance area 4910-4930.
Upsell strategy:
Entry zone: When gold prices rise to the 4910-4930 resistance zone and show signs of pressure (such as stagnation, or an upper shadow line).
Stop Loss: Set above 4950.
Target: 4780-4800 area.
Breakthrough follow-up strategy:
Breakthrough buying strategy: If the gold price is strong and stable above 4930, especially at the close of the day, it is recommended to buy slightly. Target: 5000, 5100. Stop loss below 4900.
Breakthrough selling strategy: If the gold price actually falls below the 4730 support level, it is recommended to sell slightly. Target: 4700-4680. Stop loss is above 4760.
Risk warning and position management:
High volatility: The market is greatly affected by news, causing prices to fluctuate violently. All trades must include strict stop loss orders.
Position limit: Before an obvious trend emerges, it is recommended to explore cautiously with position limits to avoid the risk of overexposure.
Monitor catalysts: Pay close attention to the development of U.S.-Iran tensions, speeches by Federal Reserve officials, and the trend of the U.S. dollar index. These will be the main catalysts for short-term sharp fluctuations in gold prices.
Time frame: This strategy is mainly suitable for short-term trading and day trading. For medium and long-term investors, it is recommended to wait for clearer trend signals to appear.
