August 14th Gold Analysis

August 14th Gold Analysis

Current Price Dynamics
Spot gold surged and then retreated, hitting a three-day high of $3,375/oz before encountering selling pressure. It is currently trading around $3,345, essentially unchanged from the previous day's closing price. Gold prices are caught in a short-term tug-of-war between bulls and bears: on the one hand, rising global risk sentiment is suppressing safe-haven demand; on the other, growing expectations of a Fed rate cut are providing key support.

I. Analysis of Core Drivers
1. Risk Appetite Suppresses Gold Prices
Optimistic expectations regarding two major geopolitical developments have significantly boosted risk assets:
- Expectations of a three-month extension of the US-China trade truce continue to build;
- The US-Russia summit (August 15th) could potentially help resolve the Russia-Ukraine conflict.

This has pushed the S&P 500 and Nasdaq indices to consecutive record highs, weakening gold's safe-haven appeal.

2. Fed policy expectations dominate bullish sentiment.
- The probability of a September rate cut is approaching 100%: The CME FedWatch tool shows that the market is betting on a 25 basis point rate cut in September, with the possibility of two cumulative rate cuts by the end of the year.
- Policy divergence is intensifying:
- Treasury Secretary Bensont called for a 50 basis point rate cut next month;
- Chicago Fed President Goolsbee expressed concerns about core inflation and hinted against a September action;
- Atlanta Fed President Raphael Bostic acknowledged weak employment but avoided a rate cut stance.
- The US dollar index fell to a two-week low under pressure, while US Treasury yields fell (10-year Treasury yield at 4.23%), further reducing the cost of holding gold.

3. Mixed technical signals:
- Positive signals:
- Successfully holding above the 200-period moving average on the 4-hour chart ($3343-3342);
- Breaking through the $3358-3360 resistance zone confirms a short-term bottoming structure.
- Hidden concerns emerge:
- Hourly and daily oscillators lack upward momentum;
- $3,375 forms a high point of resistance, suppressing any potential rebound.

II. Key Technical Levels and Path Analysis
Key Resistance Areas
1. $3,375 (intraday high) → A breakout would target the psychologically important $3,400 level;
2. $3,409-3,410 (last week's high) → A breakout would open up the intermediate resistance level of $3,422-3,423;
3. $3,434-3,435 → The ultimate target is the historical peak of $3,500.

Core Support Bands
1. $3343-3342 (200-period moving average on the 4-hour chart) → Short-term bullish-bearish watershed;
2. $3331 (this week's low) → A break below could trigger a decline towards $3300;
3. A break below $3300 would reverse the short-term technical structure to bearish.

III. Trading Strategy
Long Opportunity
- Entry Conditions: Gold price stabilizes at $3350 and the hourly MACD shows strong volume;
- Tactical Strategy: Build positions in batches within the 3345-3355 range, with a stop-loss below $3340;
- Target Level: $3375 → $3400 → $3422 (gradually reduce positions).

Short Strategy
- Trigger Scenario: Risk sentiment continues to rise;
- Reverse Signal: If the price falls below $3340, try shorting with a small position, with a stop-loss above $3355;
- Target Range: $3331 → $3310 → $3300.

Breakout Trend Following
- If the price breaks through $3380 on high volume, buy above $3400;
- If the price falls below $3330 with a long bearish trend, follow the trend and place a short position with a target below $3300.

Trade with caution and manage risk! Wish you good luck!