On Monday, June 29th, during the early Asian trading session, spot gold experienced slight declines within a narrow range, currently trading around $4,070.

Spot gold rebounded by 1.36% last Friday, closing at $4,081. However, the precious metal has now declined for four consecutive weeks, marking its longest weekly losing streak since 2023.

Since reaching its all-time peak of $5,596 on January 29th, the price of gold has plummeted by approximately 29%. The asset once hailed as the ultimate safe haven is now under significant pressure.

This week, key variables will be the US Non-Farm Payrolls data and the ongoing US-Iran negotiations.

Key Fundamental Factors

Regarding the Middle East situation: 1) The US and Iran exchanged strikes over the weekend, and Iran was absent from technical talks scheduled for the 28th. 2) Subsequent US media reports indicated that both parties have agreed to halt mutual strikes and will meet in Qatar this Tuesday to focus on the Strait dispute, attempting to shore up a ceasefire agreement that has shown cracks after just 11 days in effect. 3) The Iranian Foreign Minister stated that the Strait will be under full Iranian control within the next 30 days, and any interference will delay its reopening.

Concerning the US Dollar and Oil: Both major oil benchmarks closed lower last Friday. Brent crude fell 2.6% to $73.16 per barrel, while US crude also dropped 2.6% to $70.07 per barrel. The decline was attributed to more tankers continuing to pass through the Strait of Hormuz, significantly easing supply concerns triggered by a previous cargo ship attack near Oman.

The US Dollar declined for a second consecutive session on Friday as key US inflation data met expectations and falling oil prices slightly tempered market expectations for Federal Reserve rate hikes. Nonetheless, the Dollar Index still posted a weekly gain and recorded its largest monthly increase since last July.

The strong US Dollar has acted as a heavy weight, consistently pushing gold prices lower.

On the data front: On Wednesday, Federal Reserve Chair Warsh, European Central Bank President Lagarde, Bank of England Governor Bailey, and Bank of Canada Governor Macklem are scheduled to speak at the ECB Forum, which investors should monitor closely.

The US June Non-Farm Payrolls report will be released early on Thursday due to the US Independence Day holiday on Friday. This report carries significant weight; stronger-than-expected employment data could solidify market bets on Fed rate hikes, while weak data might lead investors to push back their expectations for the timing of any hikes.

Technical Perspective

From a daily chart perspective, gold faced renewed downward pressure last week, falling below the key 4,000 level and finding temporary support near 3,960 at the lower boundary of its daily range. However, the rebound on Thursday and Friday was limited, with resistance encountered near the 5-day moving average.

The daily chart structure suggests the possibility of a continued corrective bounce early this week, but upside potential appears limited. The moving averages remain in a bearish, downward-sloping alignment, indicating the overall trend is still biased to the downside.

Therefore, the primary focus early this week will be on the resistance battle around the 10-day moving average near 4,140. If the price declines again, attention should turn to testing the lower range boundary around 3,940-4,000.

Looking at the 1-hour chart, when gold broke below 4,000 last week, the hourly chart showed oversold conditions, followed by a technical rebound. However, the extent and momentum of this rebound were still weak.

In the short term, there may be room for a further extension early this week. If the price moves higher, watch for a struggle around 4,100, with key focus on the 4,140-50 area. This zone represents the 10-day moving average pressure and the maximum allowable rebound resistance on the hourly chart.

On the downside for the start of the week, monitor the 4,020-4,000 area.

Trading Strategy for Today

Conservative traders may opt to observe the market at the start of the week, waiting for the price to consolidate for another 1-2 days or for the outcome of potential US-Iran talks on Tuesday before adjusting their strategies accordingly.

Aggressive traders could consider short-term, range-bound strategies within the 4,000-4,150 interval, employing both buy-low and sell-high tactics.

Specifically, consider initiating light long positions on a pullback to 4,040-35 or 4,025-20, with a manual stop-loss below 4,000, targeting 4,090-4,100 and potentially testing 4,140-50.

If the price tests the 4,140-50 resistance area, consider attempting short positions. Specific strategies will require real-time adjustments based on market conditions.