On Wednesday, June 18, during the European trading session, spot gold prices fluctuated slightly within a narrow range. As of the time of publication, gold was quoted at $3,386.70 per ounce, down 0.03%. The gold price opened at $3,389.65 per ounce, reaching a high of $3,399.79 per ounce and a low of $3,370.55 per ounce.
Market Context
This week, gold prices have been trading at elevated levels without a clear direction. The Federal Reserve is set to announce its June interest rate decision in the early hours of Thursday, Beijing time. While the market generally expects rates to remain unchanged, the focus will be on the updated dot plot and Fed Chair Jerome Powell’s comments at the press conference. Currently, the market is betting on a rate cut cycle potentially starting in September, primarily based on a series of weak US economic data released recently.
Key Economic Indicators
Retail Sales: US retail sales declined by 0.9% month-on-month in May, significantly worse than the market expectation of -0.7%.
Industrial Output: Industrial output unexpectedly shrank by 0.2%, indicating a slowdown in the US economy.
CPI Data: The US CPI data for May cooled across the board, with both the annual rate and the core annual rate falling short of expectations.
These economic indicators have strengthened market expectations for a rate cut in September. Against this backdrop, the US dollar retreated from Tuesday’s high, providing some support to gold prices.
Gold Trend Analysis
Technical Indicators: The current MACD has reached a high level with a bearish crossover and increased trading volume in the 4-hour period. The flexible indicator STO is oversold and running, representing a 4-hour volatile trend. The contraction of the three tracks of the Bollinger Bands at 4 hours also indicates the compression of the interval.
Support and Resistance Levels: The 4-hour upward pressure is located at the convergence point of the middle track and the moving average MA10, at $3,404-$3,409, while the support is at the corresponding moving average MA30 and MA10, at $3,380-$3,363. If the price is to drop directly, the rebound will not exceed the range of $3,420-$3,422.5.
1-Hour Chart: The current MACD bearish crossover of the 1-hour gold chart is convergent with reduced volume, while the flexible indicator STO is moving downward, indicating that the hourly chart continues to fluctuate weakly. The convergence and compression of the upper moving averages MA60 and MA30 correspond to the $3,412 line.
Trading Strategy
After experiencing significant ups and downs, gold prices have generally been in a volatile and adjusting trend. The trading strategy for the European session is to wait for a pullback around $3,375 to see if the gold price can reach the $3,395 level again. Another approach is to directly rise the gold price and then use a small loss to set a short position at the $3,400 mark, with the target at $3,385. Aggressive traders can participate in long bullish positions in advance with a light position.
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