Spot gold sustained its strong bullish momentum this week, entering a phase of high-level consolidation after a significant rally on August 10.
Last week, the U.S. nonfarm payrolls data fell significantly short of expectations, and prior figures were revised downward. The market priced in expectations for a Federal Reserve rate cut this year, leading to a synchronized decline in the U.S. dollar index and Treasury yields. This pushed gold prices firmly above the $4,300 mark, officially establishing a medium-term bullish trend.
Currently, the market is in a wait-and-see window ahead of the U.S. CPI data release. Volatility is contracting, and bullish momentum is slightly diminishing, which is a typical technical correction following an uptrend, with no signs of a trend reversal. Short-term price action is entirely anchored to the U.S. July CPI data: a decline in inflation would strengthen rate-cut expectations and support further gold gains, while a rebound in inflation would suppress those expectations and trigger a near-term pullback. Combined with continued central bank gold purchases globally and geopolitical safe-haven demand, the medium- to long-term downside for gold prices has been effectively capped.
The technical structure is clear. On the daily chart, gold has broken above a medium-term resistance level, with moving averages in a bullish alignment. Prices are holding above all key moving averages, reinforcing a solid medium-term bullish structure. However, the daily RSI has entered overbought territory, indicating a lack of incremental buying pressure, transitioning the market from a sharp rally to a consolidation phase. The MACD is operating above the zero line with no bearish crossover signal, and $4,300 serves as a critical daily trend pivot.
On the four-hour chart, the ascending channel remains intact, with the Bollinger Bands opening upward, and the primary bullish structure is unbroken. However, prices have repeatedly faced resistance at highs, and the MACD histogram is contracting, forming a minor bearish divergence. This reflects ongoing profit-taking, suggesting that near-term conditions are not ripe for a sustained breakout, and the market is likely to consolidate at high levels to build momentum.
Key price levels: The immediate upside resistance is at $4,365, with a break above targeting the strong resistance zone of $4,390 to $4,400. On the downside, the immediate support is at $4,315 to $4,320, with $4,300 acting as a bullish lifeline—a decisive break below would end the short-term uptrend. The ultimate defensive support for this rally is at $4,275.
Trading strategy: The medium-term bullish trend remains intact, and any pullbacks are considered healthy technical corrections, so avoid betting on a top. The short-term high-level consolidation pattern is clear, and chasing highs offers poor risk-reward. A conservative approach is to buy on dips near the $4,315 to $4,320 support zone, with a target of $4,365, and a break above targeting $4,390, with a stop-loss below $4,290. An aggressive approach could involve shorting on resistance at $4,365, but with tight risk management and quick exits.
This content is for informational purposes only and does not constitute investment advice. Investors should bear the risks of their own actions.