Driven by Three Major Negative Factors, Gold Continues Its Weak Trend
Source: Xinhua Finance
Xinhua Finance, Beijing, June 25 - Precious metals in overseas markets plummeted overnight. Spot gold dropped nearly 3% in a single day, breaking below the $4,000/oz mark, while spot silver fell more than 8% intraday. Both hit their lowest levels in thirteen months. In the short term, under the pressure of three major bearish drivers, gold prices are continuing to probe lower, maintaining a bearish trend.
On the fundamentals, the three main drivers affecting gold price fluctuations during the day are as follows:
Overall, this round is a result of the combined resonance of “monetary policy + exchange rates + geopolitics + liquidity”—four major bearish factors, so simply trying to catch the bottom is still risky. The key focus this week will be whether PCE data can ease the “rate hike narrative” and whether central banks will step in to support around the $3,950–4,000 level; the former determines direction, while the latter only supports but cannot reverse the bearish trend.
From a technical perspective, gold prices continued their descent yesterday. On the weekly chart, gold remains in a bearish pattern, highlighting the current weakness. On the daily chart, several key moving averages are suppressing the price, and currently, gold is trading below this week’s pivotal line at $4,220/oz. The indicators across multiple timeframes also suggest that bears have the advantage at present, so selling into rallies is the main trading strategy, but avoid blindly chasing the downside, as there could be a weak rebound in the short term. First support is near $3,959/oz; if this is effectively broken, support shifts to around $3,796/oz. On the upside, resistance is near $4,057/oz, and if breached, resistance moves up to the pivotal $4,220/oz area.
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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