On July 2nd, precious metals found some short-term support. Gold retreated as anticipated during the late session yesterday and has rebounded this morning, reaching the first resistance level near 4080 we previously identified, indicating a strong overall performance.
On the data front, ADP Research Institute reported on Wednesday that U.S. private sector employment increased by 98,000 in June, falling short of the expected 119,000 and below the prior month's figure of 122,000. This slowdown in private job growth for June has tempered market expectations for further interest rate hikes.
Additionally, the U.S. ISM Manufacturing PMI for June declined by 0.7 points to 53.3 from the previous month, missing the forecast of 53.9. Simultaneously, the pace of price increases for raw materials slowed notably, with the ISM Prices Paid Index plunging 9.1 points to 73, significantly below the expected 77.5. This marks the largest monthly drop since July 2022, signaling an easing of cost pressures, which contributed to yesterday's rebound in gold prices.
However, Federal Reserve Governor Christopher Waller, speaking at a European Central Bank forum last night, stated that the Fed will abandon forward guidance on interest rates, with future policy decisions relying entirely on incoming economic data. He noted that inflation risks have diminished over the past four weeks, reaffirmed the Fed's independence from political pressure, and emphasized the continuation of balance sheet reduction and internal reforms to adapt to a rapidly changing economic environment. Waller's comments on moderating inflation further cooled market expectations for aggressive Fed tightening, providing a boost to gold, though the sustainability of this move remains to be seen. Focus now shifts to the impact of the non-farm payrolls data due later today.
Spot Gold (London Gold): From a technical perspective, the daily chart closed with a bullish doji star yesterday. The Bollinger Bands are contracting, suggesting the price is poised to choose a new direction. The KDJ indicator has formed a golden cross. The MACD fast line remains below the slow line, but the green histogram is gradually converging. The broader trend remains upward-biased, while the medium-term outlook maintains a phased downtrend. On the 4-hour chart, the Bollinger Bands are preparing to open, the KDJ golden cross is expanding, and the MACD fast line is above the slow line with the red histogram gradually diverging. On the hourly chart, the Bollinger Bands are open, the KDJ lines are intertwined, and the MACD fast line is above the slow line with the red histogram beginning to converge. The price retraced as expected. Currently, short-term focus is on the rebound. Key support levels are at 4038, 4005, and 3943. Key resistance levels are at 4080, 4115, and 4144.
Shanghai Gold: Key resistance levels to watch are 896 and 906. Key support levels are at 886 and 876.
Spot Silver (London Silver): The broader trend is wide-range consolidation, with a phased downtrend on the medium-term horizon. The price declined as anticipated. Current short-term focus is on the downside movement. Key resistance levels are at 62.3 and 65.2. Key support levels are at 56.5 and 54.8.
Shanghai Silver: The immediate trading range is between 13880 and 15850. The broader range lies between 13220 and 17250.