#Gold Technical Analysis# 24K99 News during the Asian trading session on Monday (August 5th), the spot gold price fluctuated violently, with an intraday amplitude of nearly 34 US dollars. Nicholas Kitonyi, a well-known financial website FXDailyReport analyst, wrote an analysis of the future trend of gold.
Kitonyi said that from the 60-minute chart, the price of gold has fallen below the rising channel. The current gold price is slightly higher than the level of the 100-hour moving average. Therefore, gold is on the edge of the 14-hour relative strength index (RSI) oversold level.
Bloomberg reported on Monday that the trend of gold fluctuated at the beginning of this week, first fell sharply, and then regained most of the lost ground. This is because traders evaluated the impact of stock market sales and Middle East tensions.
The price of gold touched the intraday high of 2447.38 US dollars/ounce at the beginning of the Asian session on Monday, and then the price of gold fell sharply. The price of gold once fell to 2413.51 US dollars/ounce in the early Asian session.
Gold has rebounded from the low point in the Asian market and is currently trading around 2437 US dollars/ounce.
Worries about the worsening of the US economic slowdown have intensified, putting pressure on the stock market. Traders are worried that the Federal Reserve may not cut interest rates in time. At the same time, in the Middle East, people worry that the very tense situation may evolve into a more direct conflict between Israel and Iran. Israel is preparing to respond to possible attacks by Iran and its militia to retaliate for the assassination of Hezbollah and Hamas officials.
On Monday, after the opening of the Asian stock market, the Nikkei 225 index fell by 7%, and it fell more than 20% from the historical high created in July, entering a technical bear market. The TOPIX index in Japan also plunged more than 7%, triggering a fuse down. The TOPIX index fell 20% from its high point in July.
The sharp drop in Japanese stocks also affected other markets, with Korea's composite index falling more than 4%. In addition, the S&P/ASX 200 index in Australia has expanded its decline to 2%. The Singapore stock index also opened significantly lower.
Axios news website reported on August 4th that Iran will attack Israel as early as Monday (August 5th).
Although gold usually benefits from the demand for safe-haven assets during financial and geopolitical tensions, gold prices may weaken if the sale of risky assets is particularly sudden or obvious.
Two pictures of the technical prospects of gold
In terms of short-term trends, Kitonyi said that technically, according to the 60-minute trend chart of gold, the price of gold has completed a downward breakthrough from the rising channel. The 14-hour relative strength index (RSI) has also fallen, approaching the oversold level of the index.
Therefore, the gold shorts will seek to continue the current retracement trend of the gold price and fall to $2402/oz or even lower to $2377/oz. On the other hand, gold longs will seek to profit from the gold price when it rebounds to $2451/oz or even higher to $2477/oz.
(Spot gold 60-minute chart source: FXDailyReport)
Kitonyi pointed out that on the daily chart, the price of gold is trading in a slow-rising channel. However, before reaching the overbought condition, the 14-day RSI still seems to have running space.
Therefore, the gold longs will set the rebound target at about $2498/oz or even higher to $2572/oz. On the other hand, the gold shorts will set the long-term profit callback target at about $2350/oz or even lower to $2276/oz.
(Spot gold daily chart source: FXDailyReport)
At 10:42 Beijing time, the spot gold was at $2436.81/oz.