On Wednesday, July 29, international gold prices experienced a volatile roller-coaster session, ultimately closing higher. The metal initially extended Tuesday's downward pressure, driven by technical resistance. However, it found support from bargain buying at lower levels. Ahead of the Federal Reserve's decision, market expectations for a rate hike diminished. The Fed kept rates unchanged, and during Chair Powell's speech, traders' probability for a September rate cut fell from approximately 81% to 64%, which boosted gold prices.
Nevertheless, profit-taking and the still-hawkish tone of the remarks limited the upside momentum. This caused some pullback, keeping prices within the recent trading range. While there is still a short-term outlook for base-building and a potential rise, the 100-day moving average has formed a death cross with the 200-day moving average. This suggests significant downside risk remains. Therefore, until this bearish signal is reversed, any rallies should be viewed as temporary, with the potential for further declines toward the $3,900 level or lower.
In terms of specific price action, gold opened at $4,029.53 per ounce in the Asian session. It initially rose to around $4,047 by the end of the Asian session before encountering resistance and falling. During the early US session, it hit the day's low of $3,995.62. At this point, it found support and rebounded strongly. Buying pressure continued, pushing the metal past the Asian session high to reach the day's peak of $4,116.12 by the early hours of the following day. It then pulled back to around $4,044, found support again, and finally settled at $4,066.14. The daily range was $120.5, with a net gain of $36.61, or 0.91%.
Outlook for Thursday, July 30
Looking ahead to today, international gold prices opened stronger, extending the rebound from Wednesday's late-session pullback. The US Dollar Index fell sharply on Wednesday, erasing last week's gains. It closed below its middle Bollinger Band and short-term moving averages, signaling a short-term weakening of the dollar, which is providing support for gold prices. Consequently, the short-term outlook for gold remains tilted toward a consolidation with a bullish bias and a rebound tendency.
Today's economic calendar features several key US data releases, including the weekly initial jobless claims for the week ending July 25, the June core PCE price index, June personal spending, the advance Q2 GDP estimate, the advance Q2 personal consumption expenditures estimate, the advance Q2 core PCE price index, and the monthly June core PCE. The overall market expectation is for these data to be supportive of gold prices. Therefore, the strategy for today remains to buy on dips for a potential rally. Even if a rally does not materialize, a sideways consolidation is the most likely outcome, making long positions at lower levels a prudent choice.
Technical Analysis
On the weekly chart, gold has been consolidating over the past few weeks, showing signs of base-building with a potential upward bias. Last week, the price formed a bullish reversal pattern, suggesting a potential rebound this week and beyond, which is being partially validated. However, the price remains below resistance from the 60-week moving average. The accompanying technical indicators continue to show a bearish signal without a clear shift to strength. The main Bollinger Bands also have a tendency to slope downwards. This suggests that the market may either continue to consolidate sideways or test lower levels again.
From a trading perspective, support can be watched near the trendline at $3,960 and $3,930, offering potential buying opportunities for a rally. A more significant support level lies at the 100-week moving average around $3,650, which could provide a strong base for a larger rally. On the upside, attention is on the resistance at the 60-week moving average, and whether the price can break and hold above it.
On the daily chart, yesterday's rebound brought the price back within the one-month trading range. There is a short-term bias towards consolidation and a base-building rebound. However, the 100-day moving average has formed a death cross with the 200-day moving average. This indicates that any rebound is likely temporary and is not enough to reverse the current downtrend. Therefore, the trading strategy should continue to focus on range-bound trading, with opportunities for both long and short positions.
For today's trading, reference levels for initial entries are as follows. Specific entry and exit points will be communicated to clients via real-time signals. For Gold: support is seen near $4,050 and $4,020; resistance is seen near $4,110 and $4,150. For Silver: support is seen near $57.80 and $57.10; resistance is seen near $59.10 and $60.20.