Since the June meeting on interest rates, more than half of Fed officials have predicted that interest rates may rise twice before the end of 2023. The USD has risen sharply due to the news and hit a new high in seven weeks. Figure 1 is a weekly chart of the USD index. It shows that July also continued its upward trend, if it can successfully break through the declining triangle's consolidation range, there is a high chance of measuring the increase to reach the weekly resistance of 96. Predicted that the price of gold will hit a record in the future with a deeper decline.

As mentioned in the previous article, after a wave of decline at the beginning of June, there is definitely a technical need for a rebound in gold. At present, gold has reached its first rebound target of $1,830. This price position is just the resistance of the 0.5 golden ratios of the previous wave of decline. It shows that after the gold reaches the rebound target in Figure 2, significant profit-taking has occurred. Until July 21, there was a more obvious top on the daily chart, and it is even lower than the top in June. I believe it will fall back to $1,763 and test how’s the support of the double bottom again.

Assume that a big black candlestick collapses directly in the future, then I believe that $1,760 will not be held. Once it breaks, there will be close to $100 from the support below. For short-selling investors, the profits are quite lucrative. But when you are bearish, you must also beware of false breakouts. If you break through 1,760 and then quickly pull back and show strong buying, that would be another view.

Everything should be considered in many different ways, the same as an investment. Assuming that a false downward breakthrough and then vigorously reversed its rebound happen on Gold. This proved that there was a large number of buying orders below, and the momentum seems not very weak. Bullish investors can pay attention to the upper US$1,830, which is always a ratio resistance. Once it breaks upward, it will proceed to the next level of 1,873 - 1,900, and the momentum will become strong.

To conclude, gold is controlled by the USD, and if it fails to rise above US$1,830 in one day, it will still maintain as short side dominated.

Hugo Leong Gold Analyst of Hantec Group