Gold has experienced three consecutive declines since Monday, with Wednesday's decline widening. As of the closing on Wednesday (August 9th) in Eastern Time, gold has accumulated a decline of 0.94% and continues to trend downwards. Market investors are focusing on the release of the US inflation rate and CPI data tonight. The US dollar index, US bonds, and gold have all experienced a downtrend, creating a nervous market sentiment.
The market expects the year-on-year growth rate of US July CPI to rise from 3% in June to 3.3%, while the core CPI growth rate is expected to remain unchanged at 4.8%. This indicates that the Federal Reserve will maintain relatively high interest rates for an extended period, keeping gold under pressure.
On the other hand, in the lead-up to the release of previous US CPI data, gold typically experienced narrow range fluctuations, waiting for the data before initiating a short-term trend. However, this time, the market seems to have already downplayed the short-term trend for gold, with bearish sentiment prevailing and many expecting a downward market. This is primarily due to the positive second-quarter GDP data and the expectation of a soft landing for the US economy, as it has not deteriorated significantly despite the prolonged period of high interest rates. Additionally, concerning the issue of the rate hike cycle, some analysts believe that although we are very close to the end, there have been significant improvements in certain areas, but they are not sufficient reasons for Federal Reserve officials to halt rate hikes, let alone further easing early next year. These factors provide some support for the US dollar, further suppressing gold.
From a technical perspective, the short-term MACD line for gold has shown a bearish signal since the end of July, gradually widening and showing no signs of improvement. The RSI value of 39 is below 60, and gold's downward movement is approaching the support level of the 200-day moving average (MA200) at $1900. If it breaks below that level, it will start searching for support at $1806, which also indicates a reversal in the medium- to long-term upward trend for gold. However, in the short term, the bearish signals for gold are more evident, making aggressive short positions or selling on rallies advisable.
Source: Investing.com
