Gold futures traded around $4,650 per ounce on Wednesday, maintaining levels last seen three months ago. The metal’s strength reflects a confluence of supportive factors, including a softer U.S. dollar following the Treasury’s decision to double the size of its long-term bond buybacks, which aims to bolster market liquidity.
Oil prices extended declines for a third consecutive session, easing inflation concerns and indirectly supporting gold’s appeal. In China, net gold imports via Hong Kong rose approximately 11% month-on-month in July, driven by rising investment demand.
Markets are now focused on the U.S. Personal Consumption Expenditures (PCE) data, the Federal Reserve’s preferred inflation gauge, due for release later this week. Attention is also turning to Fed Chair Kevin Warsh’s speech at the annual Jackson Hole Symposium on Friday, though no direct signals on the September policy decision are anticipated.
Technical indicators suggest short-term consolidation followed by potential downside. On the H4 chart, gold has formed a range around $4,651, with a move lower toward $4,530 expected, followed by a rebound to $4,600 and a further decline to $4,500. The MACD signal line remains above the center line but is trending downward, indicating near-term bearish momentum.
On the H1 chart, the market has retraced to $4,605 before correcting to $4,670, with a wide consolidation range forming above that level. A break below $4,605 could open a path to $4,530, with a subsequent rebound to $4,600 possible. The Stochastic oscillator’s signal line, currently below 50 and declining, reinforces the outlook for short-term downside pressure.
According to the analysis, gold’s immediate direction will hinge on U.S. inflation data and any signals from the Federal Reserve regarding policy easing or tightening.
