Gold Short-Term Rebound Unlikely to Change Medium-Term Trend: Daily Gold Market Analysis

Deep News
Aug 21

**Gold Market Analysis:**

On August 21st, gold found support near the 3311 level during early trading after an initial decline. The metal staged a strong rally during the Asian afternoon and European sessions, with acceleration continuing into the US session. Gold broke through key resistance levels at 3330 and 3345, reaching a high of 3351. The daily chart closed with a strong bullish candle, forming a clear bullish engulfing pattern. The primary catalyst for this surge was news regarding President Trump's demand for Federal Reserve Board members to resign, while the overnight Fed meeting minutes aligned with market expectations, keeping gold in sideways consolidation after their release.

Yesterday's gold reversal and $40 rally from multiple support zones (3120-3268 trendline support around 3308, overlapping Fibonacci 0.618 and 1.618 extension levels at 3312, and the non-farm payroll breakout zone at 3315-3313) fully validated our previous assessment of "medium-term bearish but short-term bullish counterattacks."

**Medium-term outlook remains unchanged:** Under the pressure of monthly doji patterns, any rallies represent distribution opportunities for longs, building momentum for larger declines. For bearish targets, short-term focus remains on breaks below 3330, 3315, 3300, and 3270 levels, with ultimate targets at 3245 and 3150-3120. Should these levels break, further downside toward 3000-2950 is possible (corresponding to tariff-related rally starting points).

Today's focus centers on US initial jobless claims data and three August manufacturing-related indicators. The market has reached another critical juncture: Was yesterday's bullish surge "one-and-done" or the beginning of a larger-scale rebound?

We lean toward the former but remain alert to extended rebound risks. For resistance, immediate focus is on the 3358-3360 zone (confluence of previous consolidation highs and short-term trendlines), with further resistance at 3370-3375 (previous heavy trading zone). Failure to break above 3358-3360 would support the "one-and-done" scenario, while a breakthrough could extend the rebound, with 3370-3375 providing only temporary resistance before potentially retesting 3400.

For support, the core level is 3330 - representing both the Fibonacci 0.618 retracement and previous secondary low support band. Additional support lies at 3320 (yesterday's European session secondary launch point, near the 1x extension level). Monitor bullish defense strength at these key support zones.

Since the non-farm payroll day earlier this month, spanning nearly three trading weeks, the market has shown distinct characteristics: Asian sessions often feature downward probes, but most trading days end with "probe and recover" patterns, while European and US sessions primarily exhibit "rally and retreat" behavior. Today's Asian session rhythm warrants close observation to determine if this pattern continues.

Overall, whether the bullish rebound is "one-and-done" or "extended," the market essence remains a choice between "direct decline" and "rally then decline." As the September Fed rate decision approaches, bull-bear competition will intensify.

**Trading Strategy:** Prioritize short positions with long positions as secondary plays. Establish short positions when rallies reach 3358-3360 and 3375 zones respectively. If decline occurs first, consider long positions supported by 3330 or 3320 levels. Our short positions above 3400, after multiple profit-locking through long trades, now carry elevated holding costs near $3500, allowing for comfortable position maintenance. Specific trading strategies will adjust based on real-time market developments.

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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