Gold prices continued their consolidation pattern on the first trading day of August, opening at $4,041.18, reaching a high of $4,083.14, and a low of $4,018.79, before closing at $4,054.59. The day's range was $64.35, with a gain of $13.41, or 0.33%, resulting in a small bullish doji candlestick on the daily chart. Without clear fundamental catalysts, gold remains trapped in a choppy pattern near the mid-Bollinger Band on the daily timeframe, maintaining a low-level consolidation with a narrowing trading range.
As this consolidation enters its seventh week, a short-term directional breakout is inevitable. Over the weekend, U.S. President Donald Trump mentioned an agreement regarding the Strait of Hormuz regarding Iran, stating that a deal on denuclearization would also be reached, and that the U.S. would hold talks with Iran on the 3rd. However, Iran's Foreign Ministry clarified that there were no plans to host or send a delegation for negotiations "these days," causing gold to retreat from its early highs after opening higher.
Meanwhile, another central bank has joined the gold-buying trend, providing a floor for prices. The Bank of Korea has restarted its gold purchase program after more than 13 years, simultaneously planning to invest in gold ETFs. This marks a formal shift for the central bank, which had long avoided gold due to political pressures, and it is now joining the global wave of central bank gold accumulation.
In terms of U.S. monetary policy, New York Fed President John Williams stated that inflation pressures are moving toward a gradual easing path. However, if inflation does not moderate as expected, the Fed will not hesitate to raise interest rates to ensure price pressures return to the target level. Overall, the expectation of further rate hikes remains the primary factor suppressing gold prices, with geopolitical noise from the Middle East conflict acting as a short-term market driver.
Market focus is now fully shifting to Friday's U.S. non-farm payrolls report. Before this release, gold is expected to maintain its low-level consolidation pattern. From a technical perspective, the weekly chart shows gold has been oscillating in a $3,940-$4,200 range for seven weeks, making a breakout inevitable. The 10-week moving average is gradually declining to $4,125, and if gold breaks upward, it could target the $4,200 level.
The daily chart pattern indicates that since gold touched the $4,000 mark in late June, the overall structure has been at the tail end of a low-level triangular consolidation. The resistance zone above $4,100-$4,120 and the upper Bollinger Band at $4,145-$4,165 continue to cap further upside. On the downside, support is concentrated in the $4,020-$4,000 range and the daily lower Bollinger Band at $3,975-$3,970, which provides strong support. In conclusion, gold is expected to trade within a $3,970-$4,165 range in the short term, with the core consolidation zone between $4,000 and $4,120. The current consolidation pattern is likely to persist, and patience is required as the market awaits the direction of the breakout.