Gold prices firm as rate-hike bets ebb, Fed minutes loom (with trading strategy)
'It's one step forward, two steps back' for gold bulls, but Wall Street remains bullish on gold price. Japan may be forced into U-turn over Olympics crowds.

Gold held firm below a two-week high on Monday, as concerns eased over an earlier-than-expected rate hike by the Federal Reserve after a mixed bag of U.S. jobs data, while focus shifted to minutes from the U.S. central bank’s June policy meeting.
Higher interest rates translate into a reduced opportunity cost of holding bullion, which pays no interest.
Spot gold rose 0.16%to $1790.67 per ounce and the spot silver rose 0.35% to $26.553 by 11:50(GMT+8).
“Last week’s payroll numbers provided a lot of mixed signals and the data wasn’t solid enough to move that Fed needle,” Stephen Innes, managing partner at SPI Asset Management, said.
“However, economic growth in the United States is quite strong, inflation is quite strong ... We have to be very cognizant as markets are still playing a hawkish Fed hand and this is going to limit gold topside ambitions.”
Data on Friday showed U.S. companies in June hired the most workers in 10 months, but unemployment ticked higher, workforce participation didn’t budge and the pace of hourly earnings growth slowed.
Meanwhile, a rebound in the U.S. labour market is strengthening investors’ focus on economic data and the Fed’s next move, as markets cheer further evidence of a robust economic recovery amid worries over persistent inflation.
Minutes of the Fed’s latest meeting due to be published on Wednesday could shed more light on policymakers’ views on inflation and monetary policy.
Spot gold may break a resistance at $1,789 per ounce and rise to $1,813,as suggested by its wave pattern and retracement analysis, said Reuters technical analyst Wang Tao.
Japan’s services sector activity shrank for the 17th straight month in June as the coronavirus dampened demand at home and abroad, underscoring sluggish momentum for the world’s third-largest economy.
Japan could be forced to reverse a decision to allow up to 10,000 local sports fans to attend events at this summer’s Olympics, as a rebound in coronavirus cases has made it less likely that restrictions in place in Tokyo can be lifted, as planned, before the Games begin.
The Tokyo 2020 organising committee and the International Olympic Committee (IOC) announced last month that attendances would be capped at 50% of a venue’s capacity, or up to 10,000 spectators. They had already decided not to allow overseas visitors to attend.
The Japanese prime minister, Yoshihide Suga, said having no spectators remained an option, with the number of Covid-19 infections rising steadily since he ended a full state of emergency in the capital and other regions towards the end of last month.
“I have made clear that having no spectators is a possibility,” Suga said. “We will take steps as we prioritise the safety and security of the people.”
Japanese media reported on Friday that the IOC and other parties would meet on 8 July to discuss the spectator cap, with the Yomiuri Shimbun newspaper claiming fans could be banned from Olympic events held at night or in larger venues.
Concern is growing that the arrival of tens of thousands of athletes, journalists, officials and other Games-related staff could trigger a fresh wave of infections after the Olympics open on 23 July, despite reassurances by organisers that they have taken steps to ensure a “safe and secure” event.
Kitco gold survey
Wall Street and Main Street are once again bullish on gold next week, both expecting higher prices as the precious metal continues to trade just below the $1,800 an ounce level, according to Kitco's weekly gold price survey.
Gold is ending the week nearly flat, up 0.22% after registering the worst monthly performance in more than four years in June. August Comex gold futures were last trading at $1,782.20 an ounce.
After a mixed employment report from June, markets will be focusing on the Federal Reserve's June monetary policy meeting minutes. All eyes will be on whether the hawkish sentiment matches up with the comments made during the meeting itself.
"Markets are expecting a hawkish tilt, and anything that tells us there is no hawkish tilt is a little bit less than people were pricing in, and gold could rally," TD Securities head of global strategy Bart Melek told Kitco News.
Kitco's gold price survey results from this week showed that out of the 13 participating analysts on the Wall Street side, 69.2% were bullish on prices next week, while the other 30.8% were neutral. There were no bearish votes this time around.
On the Main Street side, out of the 256 participating retail investors, 49.6% were bullish on prices next week, 25.8% were bearish, and 24.6% were neutral.
Photo: KITCO
Many analysts described this week's price action as a frustrating one for the gold bulls.
"It's been one step forward and two steps back. Gold couldn't hold $1,800 and went down to mid-April lows of around $1,760. Now we are popping back up on unemployment data. Everything screams inflation, but the problem has been the rally in the U.S. dollar," said Walsh Trading co-director Sean Lusk.
The $1,800-$1,815 area will be the first obstacle for gold next week, said Bannockburn Global Forex managing director Marc Chandler. "I look for gold to correct higher after finding support near $1,750," Chandler noted. "The momentum indicators appear to be bottoming."
A close above $1,820 an ounce is the key level to watch as it could signal a breakout point for the yellow metal, RJO Futures senior commodities broker Daniel Pavilonis told Kitco News.
"Gold has seen a washout at the end of the second quarter. The same thing happened last quarter around the Fed announcement. We are seeing support along the 200-day moving average," Pavilonis said. "The $1,820 is the breakout level. If we close above it, gold could go much higher and even make new highs, especially with the U.S. dollar topped out."
Analysts did warn that the trading volume will be light on Monday because of the Fourth of July long weekend in the U.S.
"I expect today and Monday to be quiet for the U.S. holiday, but overall, gold technically looks like it has turned a corner, and the current bounce may continue," said SIA Wealth Management chief market strategist Colin Cieszynski.
A good way to tell whether the trend in gold will be bullish or bearish next week is to watch the $1,750-$1,800 range, said Kitco's senior analyst Jim Wyckoff.
"Prices are trapped in a trading range of $1,750 to $1,800. The direction in which prices' break out' of that range is likely to be the direction of the next trending price move," Wyckoff explained.
Trading strategy (Source: Trading Central)
Pivot: 1760.00
Our preference: long positions above 1760.00 with targets at 1806.00 & 1832.00 in extension.
Alternative scenario: below 1760.00 look for further downside with 1749.00 & 1740.00 as targets.
Comment: the RSI calls for a new upleg.
Supports and resistances:
1844.00
1832.00
1806.00
1791.20 Last
1760.00
1749.00
1740.00
Guideline for Trading Central strategy
Trend chart reading guideline
1. First look at the time period in the upper left corner of the chart:
‧30MIN and 1H chart shows the trading suggestions for intraday
‧Daily chart shows the market trend analysis in next 2-3 days
2. The blue horizontal line on the chart marks the pivot: pivot indicates the reversal of the market. When the price is above the pivot, it indicates an upward trend, when the price is below the pivot , it indicates a downward trend. When the price breaks through the pivot, the trend is reversed.
3. The red and blue thin curves in the Candlestick chart chart are technical indicators: Red line is MA20+Bollinger bands, Blue line is MA50. under the Candlestick chart chart are also the technical indicators: Blue line is RSI, Red line is 9MA;
4. The green horizontal line is the resistance level for a price increase, and is also the profit target for long orders; the red horizontal line is the support level for a price decrease, and is also the profit target for short orders.
How to use TC strategy?
1.[Pivot] is the reversal line of the market trend. When the price up the pivot line which means in Bullish, you can open a long position or Buy. on the contrary, when the price under pivot line which means in bearish. You ‘d better make short positions or Sell.
2. [our preference] is the main trading suggestion for your reference. You can exit your trading refer to this target or close positions before it.
3. [Alternative scenario] is the plan B for your reference.
4. [Comment] is the technical analysis of market trends and technical support for trading strategies.
5. [Supports and resistance] Supports are levels where the price tend to find support as it falls.
Resistances are levels where the price tend to find resistance as it rises. So, exit before the trend reverse.
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