On August 14, gold's upward momentum has stalled, marking a definitive end to the previous sustained rally. After testing the 4449 resistance level early in the previous session, gold prices showed signs of exhaustion, with bullish momentum completely fading.
Thursday evening saw the release of several key U.S. economic data points, including inflation and employment figures, which generally indicated a moderately loose environment. Theoretically, this data should have supported gold prices, but the market exhibited a classic "buy the rumor, sell the fact" pattern. This, combined with concentrated profit-taking from long positions accumulated over the past few days, as well as a rebound in the U.S. dollar and Treasury yields from recent lows, has triggered a series of stepwise declines. The market has now transitioned from a high-level consolidation to a vulnerable deep correction phase.
Key Data Insight: Moderate Data, but Market Sentiment Already Priced In
At 8:30 PM Thursday, the U.S. July Producer Price Index (PPI) and initial jobless claims data were released, providing a second check on inflation and employment conditions. Inflation at the producer level showed signs of cooling, with the monthly PPI flat and core PPI below expectations, confirming easing inflation pressures in the industrial sector. Employment data also weakened, with initial jobless claims coming in at 209,000, higher than expected, indicating a loosening labor market. Combined, these data points generally reduce the likelihood of further Federal Reserve rate hikes, which theoretically should be bullish for gold. However, following a prolonged rally, the market had already fully priced in the benefits of rate cuts, so the data release lacked additional positive momentum. Instead, it triggered concentrated selling by profit-takers at higher levels. Simultaneously, the U.S. dollar index and Treasury yields stabilized and rebounded from recent lows, directly pressuring gold valuations. The convergence of these factors has led to sustained weakness in gold prices from their highs, marking a formal shift to a bearish trend.
Multi-Timeframe Technical Analysis: Short-Term Trend Turns Bearish, Overbought Signals Trigger Correction
On the daily chart, the market has clearly broken out of its consolidation range, forming a definitive correction. The previous high-level resistance was followed by a long upper shadow and a bearish candlestick, providing a clear short-term sell signal. Gold has now lost key support levels at 4380 and 4360, completely breaking the previous high-level consolidation structure. The short-term moving average system has also turned downward, forming a bearish alignment from top to bottom, confirming a shift from a bullish consolidation to a bearish downtrend. The accumulated overbought risk is now being fully released, and the momentum for a bullish recovery is expected to be exhausted, leading to a formal entry into a deep correction cycle.
On the 4-hour chart, the structural bearish characteristics are particularly clear. Prices are consistently declining along the moving average resistance, with highs steadily moving lower and lows constantly being refreshed, forming a well-defined downtrend. Technical indicators are also fully under bearish pressure, with short-term bearish momentum being released. The market is now firmly under bearish control, with no clear signs of stabilization or reversal.
The hourly chart shows a direct continuation of the overnight decline. Prices opened lower today and continued to probe downward, nearing the 4310 level. Short-term indicators have entered deeply oversold territory. While this oversold condition will inevitably create short-term technical bounces for repair, the overall bearish trend is now firmly established. Any subsequent bounces are likely to be limited to corrective moves and cannot reverse the current downward trend. Instead, any such bounces are expected to provide new selling opportunities for bearish traders.