Facts:
- Institutional investors continue to increase their exposure to gold
- The first deadline for new U.S. trade agreement negotiations is set for July 8
- ETF funds and futures market participants recognize rising risk and are increasing their gold allocations
- Since the start of the week, the U.S. dollar index has dropped nearly 2.00%
Recommendation:
Long position at market price
- TP: 3400; 3440
- SL: 3220
Opinion:
Gold is currently in a corrective phase, but its long-term uptrend remains intact. The 3320 USD level and the 23.6% Fibonacci retracement (3290 USD) also act as technical support. Although the MACD signals a temporary weakness in momentum, key support levels have not been breached. Gold is also approaching the end of a seasonal consolidation phase, which could suggest a resumption of the upward trend. Therefore, a rebound scenario toward the 3400 and 3440 USD resistance levels still appears plausible.
Fundamentals further support the demand side. Institutional investors and ETF funds are visibly increasing their gold exposure — ETFs have recorded nine consecutive days of purchases, reaching their highest reserve levels since the end of 2023. Meanwhile, the U.S. dollar index has fallen nearly 2% this week, which may enhance gold’s appeal to foreign investors and trigger capital flows out of the dollar. Additionally, the upcoming July 8 U.S. trade negotiation deadline could raise market uncertainty.
For these reasons, we recommend taking a long position in gold, while simultaneously setting a stop-loss order to minimize potential downside risk.
Source: xStation 5
Methodology
The recommendation was based on the fundamental analysis of the gold market, its correlation with other financial markets, and technical chart analysis. The target levels were determined using classic support and resistance levels as well as price action analysis.
