Gold prices experienced a substantial rebound last week, driven by cooling geopolitical tensions and growing optimism over the free passage of the Strait of Hormuz. This was further supported by weaker-than-expected US jobless claims and non-farm payroll data, which lowered expectations for a Federal Reserve rate hike. The rally erased nearly two months of losses, broke the recent consolidation pattern, and closed decisively above the 60-week moving average, signaling increased bullish momentum. This suggests potential for further gains towards the $4,500 level and possibly even the $4,700 mark.

In terms of price action, gold opened the week at $4,080.39 per ounce, initially filling a gap to a low of $4,018.79 before reversing higher. Strong upward moves on Wednesday and Friday pushed prices to a weekly high of $4,371.31, before a slight pullback saw the metal close at $4,340.86. The week's trading range was $352.52, with a net gain of $289.63, or 7.15%, compared to the previous week's close of $4,051.23.

Key factors driving the rebound and the new risks

Looking ahead to Monday (August 10), gold opened with a narrow range. The positive catalyst from Friday's disappointing jobs data was partially offset by news that Iran has raised its demands in the Strait of Hormuz negotiations. This has stalled the deal, with the US President adopting a more patient stance, and has effectively reduced the downward pressure on safe-haven demand. The short-term outlook is for a period of consolidation or a potential failed rally, with resistance from the 100-day and 200-day moving averages remaining a key focus.

On the fundamental front, the easing of geopolitical tensions and the prospect of free passage through the Strait had initially weighed on oil prices. However, the US July non-farm payrolls report showed a loss of 23,000 jobs, a significant miss against the market expectation of an 80,000 gain. Revisions to May and June data were also negative, further dampening the case for a Fed rate hike. This combination of factors drove gold prices higher. The situation is now complicated by the stalled negotiations, as Iran has raised its conditions. This has reintroduced geopolitical risk, while the security situation in the Middle East continues to deteriorate. An attack by Houthi forces on a Saudi refinery has heightened regional energy risks. Attention now turns to the US July CPI data. Market expectations are mixed, and a print in line with forecasts could see gold face a correction from its recent highs. Conversely, weaker-than-expected data (indicating easing inflation pressure) would likely fuel another leg higher, targeting the 30-week moving average.

Technical analysis points to both upside and downside risks

On the monthly chart, gold has completed a bullish reversal pattern from July's lows, but faces considerable resistance from the 5- and 10-month moving averages, as well as the upper trend channel. A sustained breakout above these levels is needed to confirm a move towards the $5,000 level. However, given the recent lows, the downside risk appears limited, and any further pullback would be seen as a buying opportunity.

On the weekly chart, last week's strong rally has pushed prices above the 5-, 10-, and 60-week moving averages. The MACD indicator shows a weakening bearish signal, while the KDJ has formed a bullish crossover, suggesting the potential for further gains towards the $4,500 or $4,700 targets. However, the metal is now approaching the Bollinger Band middle line and the upper trend channel resistance, which could trigger a pullback.

On the daily chart, gold has broken higher from its consolidation above the rising trend line. However, the 100-day moving average has crossed below the 200-day moving average, forming a bearish "death cross." This highlights the risk of a rejection at resistance levels. A sustained move above these moving averages would be a strong bullish signal. For the day, resistance is seen at the 100-day and 200-day moving averages, while support lies at the Bollinger Band upper line and short-term moving averages.

For intraday trading, key support levels for gold are around $4,300 and $4,240 per ounce, while resistance levels are at $4,390 and $4,440 per ounce. For silver, support is at $63.20 and $62.80, with resistance at $65.30 and $66.40.