Gold market analysis

The gold price remains in a sideways movement, waiting to be broken

2025-07-09

"Gold Price Maintains Sideways Pattern Awaiting Breakout" 8/7 10:12 am Finalized 

Last night, US President Trump announced that starting from August 1st, the United States would impose a 25% reciprocal tariff on Japan and South Korea. He also stated that if Japan or Japanese enterprises decide to build factories or manufacture products within the United States, no tariffs would be imposed. Japanese Prime Minister Shinzo Abe expressed regret over the US decision to impose tariffs on Japan and instructed that Japan would continue to negotiate with the United States on tariffs. He also said that the negotiations between the two sides in the past period had successfully avoided tariffs of 30 to 35%. 

In addition, tomorrow is the deadline for the suspension of reciprocal tariffs. Although countries are eager to reach an agreement with the United States, the overall uncertainty of trade negotiations remains high. Over the past few months, central banks around the world have continuously increased their gold holdings, which is one of the reasons for the rise in gold prices. The People's Bank of China also increased its gold reserves by 70,000 ounces in June, marking the eighth consecutive month of increase. However, the holdings of SPDR Gold ETF have remained unchanged in the past two trading days. It is estimated that investors are waiting to see what kind of trade agreement will be reached between countries and the United States before the deadline, and therefore are temporarily holding back. 

Short-term trapped between the 20-day and 50-day moving averages 

The news that the US imposed tariffs on Japan and South Korea led to a sharp drop in the US stock market. Spot gold prices rebounded continuously after hitting a low of $3,296.5 in the European midday session yesterday. The related news further pushed up the gold price, which reached a high of $3,335.9 in the early Asian session today. The significant rebound in gold prices yesterday enabled it to close above the 50-day SMA ($3,322) for five consecutive trading days, but it still failed to break through the 20-day SMA ($3,350.7), remaining trapped between the two moving averages and waiting for a breakout. 

As the gold price closed in a piercing pattern on July 3rd, it is expected to fluctuate between $3,312 and $3,365 before breaking above the top of that day at $3,365.8. In the short term, if the gold price breaks below the ascending trend line on the hourly chart, the measured decline target is approximately $3,306, and $3,346 is expected to be the main resistance level for the immediate period. As there are no significant data releases from the US today, the gold price is likely to continue in a range-bound pattern, but tariff-related news will make its performance more volatile. 

The above content is for reference only and does not constitute investment advice. 

MTF Special Analyst Zheng Guangfu



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