Buy Low and Sell High During Fluctuation

Summary:

Powell hinted that the Fed is considering a rate cut, but would not give a specific date. This uncertainty is driving up volatility in the rate-sensitive precious metals market.

SELL XAUUSD

Close Time

CLOSED

2383.44

Entry Price

2300.00

2427.00

4836.44 +95.68 +2.02%

435.6

Pips

Loss

2300.00

2427.12

Exit Price

2383.44

Entry Price

2427.00

Fundamentals

Federal Reserve Chairman Powell testified on Tuesday morning before a Senate Banking, Housing, and Urban Affairs Committee hearing, reaffirming key messages from the June FOMC meeting including a dovish stance on the federal funds rate.

In his opening remarks, Powell stated, "The Fed remains focused on our dual mandate of promoting maximum employment and stable prices for the benefit of the U.S. people." He highlighted significant progress over the past two years towards achieving the Fed's 2% inflation target, with labor market conditions remaining robust while cooling slightly. These developments have helped better balance the risks to achieving our employment and inflation objectives." These factors are seen as key drivers behind speculation of a rate cut in September, though Powell refrained from disclosing a specific date. Such uncertainty is fueling increased volatility in rate-sensitive precious metal markets.

Boosted by rising expectations of a Fed rate cut, gold prices continued their uptrend on Wednesday, reaching as high as US$2,375 during the European session as investors awaited the release of U.S. inflation data, keeping gold in the spotlight.

Furthermore, inflows into Exchange-Traded Funds (ETFs) have surged, enhancing gold's appeal with positive cash flows for the second consecutive month. This investment trend underscores gold's role as a safe haven asset amid financial market uncertainties.

Buy Low and Sell High During Fluctuation_1

Technical Analysis

Amid uncertain expectations of a Fed rate cut, the situation continues to impact the interest rate-sensitive precious metals market, leading to increased volatility. As of the time of writing, the spot gold price has surpassed US$2,380.

In the 4H timeframe, the gold price has rebounded four times from the key level of 2,350 since last Friday, forming a more complex top pattern. Despite the intraday gains in gold prices, from a broader perspective, it remains within the consolidation range that has encompassed most of the price trend since the beginning of April. We still recommend to buy low and sell high within the range.

Overall, the gold price shows a short-term uptrend, yet in a broader time frame, it is still consolidating. To achieve a positive outlook, a decisive break above the psychological threshold of 2,400 is needed.

Trading Recommendations

Trading Direction: Sell

Entry Price: 2387

Target Price: 2300

Stop Loss: 2427

Deadline: 2024-07 - 25 23:55:00

Support: 2329, 2337, 2330, 2319

Resistance: 2371, 2378, 2387, 2400

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