#Gold Technical Analysis# 24K99 News As of Thursday (July 25th) in the Asian market, the spot gold suddenly had a very volatile trend, and the gold price fell sharply by 30 US dollars in the short term.
Due to the weak US dollar and the market's complete pricing of the Federal Reserve's interest rate cut in September, spot gold briefly broke through the $2,430/ounce mark on Wednesday, but later fell back due to profit-taking by traders and factors such as rising US bond yields, ultimately falling 0.51% to $2,396.86/ounce.
During the Asian trading session on Thursday, the spot gold fell sharply from the level around 2400 US dollars/ounce earlier and has now fallen to around 2370 US dollars/ounce at the lowest level.
(Source: 24K99) 15-minute chart for spot gold.
FXStreet analyst Haresh Menghani said that on Thursday, the gold price continued the sharp pullback from the high point of the week the day before, and suffered heavy selling pressure for the second consecutive day. Although this decline lacks obvious fundamental factors to promote it, it still dragged gold to a two-week low, reaching around 2370 US dollars/ounce during the Asian session.
Menghani stated that the gold price drop may be due to some technical selling, but it may still be limited. The Fed's September rate cut bets and risk aversion may provide support before the announcement of US data.
Menghani added that before taking a large bearish approach to the gold price, it is necessary to remain cautious because traders are eagerly awaiting the US second-quarter GDP data later on Thursday to seek new driving force. However, the market's focus will still be on the US Personal Consumption Expenditures (PCE) Price Index, which will play a key role in influencing the Fed's policy path and provide new directional motivation for gold.
What is the outlook for gold after the sharp drop in gold prices?
Menghani pointed out that as the gold price broke through the support level of $2385/ounce, the gold trend has become fragile.
Menghani wrote that from a technical perspective, the gold price fell below the 100-period simple moving average (SMA) on the 4-hour chart, the 50% retracement of the rebound trend from June to July, and the support level of $2385/ounce. These factors may be seen as new trigger points by bearish traders.
In addition, the oscillating indicator on the daily chart of gold has just begun to gain negative traction, indicating that the path with the least resistance for the gold price is downward.
Menghani said that if the gold price effectively falls below the 61.8% Fibonacci level (around 2370 US dollars/ounce), the gold price may further decline to the 50-day moving average (around 2361 US dollars/ounce). After that, the gold price is expected to test the support level around 2335-2350 US dollars/ounce.
On the upside, Menghani added that any attempt at recovery may face some resistance before the psychological level of 2400 US dollars/ounce. If the gold price continues to strengthen and breaks through the above-mentioned resistance, it may push the gold price to rebound towards the horizontal resistance level of $2412/ounce, and then move forward to the area of 2423-2425 US dollars/ounce. If gold further recovers, the gold price will aim at this week's high point (around 2432 US dollars/ounce touched on Wednesday); once this area is breached, it may trigger a new round of short covering, which should pave the way for the gold price to rise to the intermediate resistance level of 2469-2470 US dollars/ounce. This momentum may extend further to the historical high point near 2484 US dollars/ounce touched last week.
At 10:42 Beijing time, the spot gold was reported at 2370.01 US dollars/ounce.
At 10:42 Beijing time, spot gold was reported at 2370.01 US dollars per ounce.