International gold prices retreated on Wednesday (August 21) after hitting record highs after Western inflows and optimism over interest rate cuts in United States ignited a record rally.
During the session, investors are awaiting the minutes of the latest Federal Reserve meeting to clarify the magnitude of interest rate cuts.
Spot gold edged down 0.25% to around $2,507 after hitting a record high of $2,531.60 an ounce the previous day.
So far this year, gold prices have risen by about $460, or 22%, amid geopolitical tensions, uncertainty over the upcoming United States presidential election and expected rate cuts.
It is expected to further push precious metals prices to climb to higher levels.
In the physical market, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.20% from a seven-month high on Tuesday.
Gold technical analysis
On a technical note, after breaking through the 2480 resistance, gold prices eventually rebounded to the 2532 level as momentum buyers rushed in.
In the longer term, gold should be supported by falling real yields as the Fed enters an easing cycle.
However, strong United States economic data in the short term could trigger a price pullback. Tomorrow will be released United States preliminary PMI data, if the data is better than expected,
This could lead to a weakening of the price of gold, and the market’s reaction will be very interesting to watch. The market may choose to rebound, or trigger a larger decline.
–Daily chart
On the daily chart, gold recently managed to break through the key resistance zone around 2480 and rose further to the 2532 level, prompting more buyers to enter the market.
At the moment, the bulls are in the driver’s seat, and a breakout will give them more confidence to chase higher targets. On the other hand, sellers want to see the price fall back below 2480,
to nullify this breakout and prepare to target the 2360 level.
–4-hour chart
On the 4-hour chart, a strong support zone can be seen forming near the 2480 level, where the trend line and the 50% Fibonacci retracement level converge again.
If the price pulls back to the support level, buyers can be expected to enter below the trend line with clear risk, laying out new highs for a better risk-reward ratio.
Sellers, on the other hand, want to see the price break below the trend line to nullify this breakout and expect the price to move down to the 2360 level.
–1 hour chart
On the 1-hour chart, it can be seen that the price has recently rebounded on a slight upward trend line and made new highs, but for now the price has broken below that trend line.
This could indicate that the bullish momentum has weakened and price is more likely to pull back to the 2480 support level.
Author: Zhou Tong (Analyst) 21-08-2024
At 20:30 Hong Kong time, spot gold was at $2,509.06 an ounce.
# The above is only the author’s personal opinion and has nothing to do with the company’s position.
#The policy recommendations are for informational purposes only, entering the market is risky, and investment needs to be cautious.