XAU – Gold Consolidates in Low Range, Focus on Tonight's U.S. Employment Data

According to mediators, despite recent clashes in the Strait of Hormuz, indirect negotiations between the US and Iran in Doha, Qatar, have made "positive progress." This is the most concrete diplomatic progress since the signing of the Islamabad Memorandum of Understanding remotely on June 17. Qatar and Pakistan are mediating, with no direct high-level meetings held, but rather mediators shuttling between delegations. Technical negotiators are currently in Doha discussing details related to commercial shipping in the Strait of Hormuz. Meanwhile, Iran continues to attempt to exert influence in the strait, including requiring vessels to obtain permits for passage and hinting at potential future fees. Furthermore, Tehran insists that only it can conduct mine-clearing operations in the strait, challenging the mine-clearing mission led by the UK and France.

US Federal Reserve Chairman Walsh stated at the European Central Bank Forum in Portugal on July 1 that current US inflation levels remain too high, while reiterating that ensuring price stability is a priority for the Federal Reserve. Warsh said the Fed will "open a new policy path," but did not elaborate further, while avoiding questions about whether there will be an interest rate hike at the July monetary policy meeting, emphasizing that it will not provide forward guidance on future interest rate policy. Warsh stated that the Fed is establishing an independent working group to study topics such as monetary policy communication, economic data systems, productivity, the inflation framework, and balance sheet policy. He believes that if the existing policy framework affects decision-making efficiency, reforms should be implemented.

Gold was largely stable on Wednesday, briefly approaching $4115. Weaker-than-expected US ADP private sector employment data and Fed Chairman Warsh's statement that inflation expectations and risks have eased in recent weeks pushed down bond yields, boosting gold prices. Falling oil prices also benefited gold, and U.S. President Trump stated that the U.S.-Iran talks in Qatar were progressing well. Tonight's focus is on the U.S. June non-farm payrolls report, with expectations of 110,000 new jobs and an unemployment rate of 4.3%. Wednesday's ADP data showed only 98,000 new private sector jobs, lower than the expected 118,000, adding uncertainty to the dollar's trajectory. The market expects a 65% probability of a Fed rate hike in September. Currently, gold prices are trading within a triangle pattern, with the upper and lower boundaries at $4311 and $4051 respectively. If measured against a longer-term double-top pattern, the 0.5x and 0.618x Fibonacci retracement levels are $4084 and $3908. Based on the upward trend from August last year, the 0.618x and 0.786x retracements fall at $4128 and $3815. Therefore, whether gold prices can quickly reclaim $4128 this week is crucial, opening up room for a move towards the 0.5x retracement level of $4379. Based on the recent two double-top corrections, prices are expected to trade between $3998 and $4133/$4214, with support levels at $3901 and $3778. Based on recent lows, the 0.382, 0.5, and 0.618 Fibonacci retracements are $4124, $4167, and $4208 respectively. Meanwhile, the descending channel remains unbroken, with its top and bottom at $4219 and below at $3864, and the midline at $4084.

Gold has been fluctuating recently and may be forming a bottom. A significant upward move is needed to confirm a bottom and rebound. First, watch the $4080-$4120 range, a dense area of ​​resistance. A firm hold above this level would be an initial bullish signal. Secondly, another key level is the 25-day moving average, currently at $4224. A return above this level would further confirm the start of a rebound.

Short-term support for gold is expected at $4034 and $3994, with stronger support at $3954 and $3918. Resistance levels are expected at $4071 and $4109, followed by $4149 and then $4189.

London Gold July Forecast Range:
Resistance: 4124 – 4218 – 4309 – 4519
Support: 3918 – 3708 – 3618 – 3523

London Gold July 2nd:
Forecast Early Trading Range: 4034 – 4071
Resistance: 4109 – 4149 – 4189
Support: 3994 – 3954 – 3918

SPDR Gold Trust Gold Holdings:

June 22 – 1,022.20 tons
June 23 – 1,017.64 tons
June 24 – 1,013.36 tons
June 25 – 1,007.08 tons
June 26 – 1,005.80 tons
June 29 – 1,005.80 tons
June 30 – 1,005.08 tons
July 1 – 1,005.36 tons

1/7 AM London Gold Fix: $3978.55 
1/7 PM London Gold Fix: $4089.45 

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