The decline of the US dollar does not change the gold price entanglement: the "weak repair" pattern of gold has not been broken
2025-08-15 20:29:17
Before the US market opened on Friday (August 15th), spot gold was consolidating around $3,340. After briefly dipping to $3,330 the previous day, it rebounded slightly. However, the rebound was capped by dense resistance near $3,350, and the price remained hovering near a two-week low. A series of US data and the high-level US-Russia meeting in Alaska in the evening kept the market characterized by news-driven momentum and low momentum, prompting traders to adopt a wait-and-see approach with light positions.
The core contradiction of gold in recent times lies in: on the one hand, the elastic rise of the US dollar and US Treasury yields suppresses the valuation of interest-free assets; on the other hand, geopolitical and macroeconomic uncertainties provide support for the safe-haven premium. Specifically:
US Dollar and US Treasuries: The US Dollar Index (DXY) was trading in a narrow range around 97.90, having rebounded nearly 0.40% the previous day on the back of better-than-expected US producer price inflation. Regarding yields, the 10-year Treasury yield rebounded by about 5 basis points before stabilizing at 4.293%, while the 30-year Treasury yield remained around 4.884%. Rising nominal interest rates continue to impose a discount on gold.
Inflation and Fed Expectations: The Producer Price Index (PPI) jumped 0.9% month-over-month in July, the largest increase since June 2022, bringing the year-over-year rate to 3.3%. The core PPI, excluding food and energy, also rose 0.9% month-over-month and 3.7% year-over-year, both significantly exceeding expectations. Market bets on a 25bp rate cut in September, which had been fully priced in, were revised down to approximately 90% following the data. St. Louis Fed President Alberto Musalem emphasized that the inflationary pull from tariffs is likely to fade within six to nine months, stating bluntly that "the current state of the economy does not support a one-time 50bp rate cut." These comments, resonating with the inflation data, have temporarily shifted gold's interest rate sensitivity to negative territory.
Data and Meetings Outlook: July retail sales will be released tonight at 8:30 PM Beijing time (12:30 PM GMT), with consensus expectations for a 0.5% month-over-month increase and a 0.3% month-over-month increase in core retail sales excluding autos. Also on the horizon are industrial production (expected to be flat on the month) and the preliminary August Michigan Consumer Confidence Index (the overall index is expected to rise to 62, compared to the previous reading of 61.7; the sub-index is expected to fall from 57.7 to 56.5). Next week's Jackson Hole symposium in Wyoming will also provide guidance, with Federal Reserve Chairman Jerome Powell's speech on August 22nd. Any details on inflation resilience and the policy path could amplify the volatility of interest rates and gold.
Event Risk: The US-Russia talks in Alaska are centered around a potential ceasefire in Ukraine. Currently, there's no significant safe-haven premium reflected in the market. If the talks break down or tensions escalate, gold's sentiment beta could rise rapidly. Any signs of easing would dampen safe-haven demand and negatively impact gold prices.
Observing the 60-minute K-line, the three Bollinger Bands (262) are: middle band MID 3341.40, upper band UPPER 3352.68, and lower band LOWER 3330.13. The price is currently trading around the 3339-3341 line, repeatedly fluctuating below and near the middle band, indicating that the short-term trend is still dominated by "mean reversion" oscillation, with limited trend strength. The right side of the price has repeatedly attempted to rise but failed to effectively break through the upper band. The 3350-3353 area corresponds to the upper Bollinger Band and the right side of the dense trading band, forming the first resistance band; above it is the intraday high of 3374.71 on August 14 and the peak before the previous decline of 3362.68, which together form the higher second resistance band. In terms of support, the lower Bollinger band of 3330.13 basically coincides with the intraday low of 3329.79 on August 15. Below it is the low point of 3330.97 after a rapid breakout on August 13. The three together form a "strong support cluster". If they are lost, it means that the short-term rhythm will shift from sideways to downward diffusion.
In terms of momentum indicators, the DIFF of MACD (26129) is -2.13 and the DEA is -2.61, still below the zero axis. However, the DIFF is turning upward and approaching the DEA. The histogram has turned positive to 0.96, indicating that the bearish momentum has clearly converged and there is room for a short-term technical pullback. The RSI (14) is near 43.79 and has not yet left the weak range, indicating that the rebound is mainly for correction. Unless the upper track is broken through with large volume, it is difficult to say that the trend has reversed. From the perspective of the moving average, the price is generally below the main moving average and the moving average is slightly downward. The short-term rebound is more like a retracement of the previous rapid decline. Comprehensive judgment: Before it stabilizes at 3352.68, the market is more likely to follow the box-shaped pattern of "saw-tug near the middle track - retracement of the lower track - and rebound again"; once it effectively breaks through and retracement is confirmed, there is hope for upward movement towards 3362.68/3374.71.
The options structure and market dynamics reflect a typical "low-conviction, event-driven" market dynamic. First, while the US dollar index has retreated near 97.90, the reflation narrative fueled by overnight inflation data has not receded, and the upward tail of real and nominal interest rates remains a constraint on gold. Second, equity markets are recalibrating the timing and magnitude of rate cuts, while risk appetite has neither deteriorated significantly nor expanded enough to create a strong risk-off environment. Third, geopolitical events present asymmetric risks with "single-point jumps," making sentiment sensitive to breaking news. Therefore, a turning point in sentiment relies more on two triggers: first, data or speeches leading to a further easing of interest rate expectations; and second, event-based signals of "risk spillover." Absent either of these, gold is likely to remain within its Bollinger Bands, with a narrow range-bound trend and limited volume.
The short-term (1-3 days) scenario is bullish: If retail sales and sentiment weaken in the evening (below 0.5% and 56.5), while industrial production falls short of "flat," the US dollar and yields retreat, and gold breaks above 3352.68 and consolidates above the middle line, the rebound could extend to 3362.68. Further volume increases could target the upper band resistance of 3374.71. This process will be based on "momentum recovery + mean shift upward," and the MACD is expected to gradually approach the zero axis.
Bearish scenario: If the overall data is stronger than the consensus expectation (retail ≥ 0.5%, core ≥ 0.3%), coupled with the hawkish statements of officials or the lack of positive signals in the meeting, the yield will remain above 4.293% and move upward, and the gold price will be repeatedly frustrated below 3350, and then fall below the horizontal dense area near 3339. It will retest the strong support cluster of 3330.13/3329.79 again; if this cluster is lost, the Bollinger Bands may shift from "convergence" to "lower track expansion", and the short-term target will shift to "mainly lower extension of the band" rather than a simple V-shaped repair.
Event resilience: If there is a "breakthrough" uncertainty in the meeting, the reflexivity of gold will be rapidly amplified. The first thing to observe is not the price range, but the "quality of the breakthrough" (whether it is accompanied by a large volume and whether the backtest confirmation is completed).
The core variables of the medium-term (1-3 weeks) framework remain inflation stickiness and the policy path. If Jackson Hole's neutral message on August 22nd, "inflation is declining, but caution is still required," is released, the market consensus on a 25 basis point rate cut in September and a slower pace this year could be reinforced, and gold prices in the medium term are expected to "rise within the range and make up for any pullbacks." Conversely, if Powell emphasizes the risk of a second wave of inflation and favors "data-dependent and slow rate cuts," real yields will remain high, and gold will continue to "oscillate at high levels and be suppressed on rallies." Until both scenarios are proven false, trading plans should focus on range-bound trading and confirming key levels, rather than betting on unilateral trends.
Fundamentals
The core contradiction of gold in recent times lies in: on the one hand, the elastic rise of the US dollar and US Treasury yields suppresses the valuation of interest-free assets; on the other hand, geopolitical and macroeconomic uncertainties provide support for the safe-haven premium. Specifically:
US Dollar and US Treasuries: The US Dollar Index (DXY) was trading in a narrow range around 97.90, having rebounded nearly 0.40% the previous day on the back of better-than-expected US producer price inflation. Regarding yields, the 10-year Treasury yield rebounded by about 5 basis points before stabilizing at 4.293%, while the 30-year Treasury yield remained around 4.884%. Rising nominal interest rates continue to impose a discount on gold.
Inflation and Fed Expectations: The Producer Price Index (PPI) jumped 0.9% month-over-month in July, the largest increase since June 2022, bringing the year-over-year rate to 3.3%. The core PPI, excluding food and energy, also rose 0.9% month-over-month and 3.7% year-over-year, both significantly exceeding expectations. Market bets on a 25bp rate cut in September, which had been fully priced in, were revised down to approximately 90% following the data. St. Louis Fed President Alberto Musalem emphasized that the inflationary pull from tariffs is likely to fade within six to nine months, stating bluntly that "the current state of the economy does not support a one-time 50bp rate cut." These comments, resonating with the inflation data, have temporarily shifted gold's interest rate sensitivity to negative territory.
Data and Meetings Outlook: July retail sales will be released tonight at 8:30 PM Beijing time (12:30 PM GMT), with consensus expectations for a 0.5% month-over-month increase and a 0.3% month-over-month increase in core retail sales excluding autos. Also on the horizon are industrial production (expected to be flat on the month) and the preliminary August Michigan Consumer Confidence Index (the overall index is expected to rise to 62, compared to the previous reading of 61.7; the sub-index is expected to fall from 57.7 to 56.5). Next week's Jackson Hole symposium in Wyoming will also provide guidance, with Federal Reserve Chairman Jerome Powell's speech on August 22nd. Any details on inflation resilience and the policy path could amplify the volatility of interest rates and gold.
Event Risk: The US-Russia talks in Alaska are centered around a potential ceasefire in Ukraine. Currently, there's no significant safe-haven premium reflected in the market. If the talks break down or tensions escalate, gold's sentiment beta could rise rapidly. Any signs of easing would dampen safe-haven demand and negatively impact gold prices.
Technical aspects:
Observing the 60-minute K-line, the three Bollinger Bands (262) are: middle band MID 3341.40, upper band UPPER 3352.68, and lower band LOWER 3330.13. The price is currently trading around the 3339-3341 line, repeatedly fluctuating below and near the middle band, indicating that the short-term trend is still dominated by "mean reversion" oscillation, with limited trend strength. The right side of the price has repeatedly attempted to rise but failed to effectively break through the upper band. The 3350-3353 area corresponds to the upper Bollinger Band and the right side of the dense trading band, forming the first resistance band; above it is the intraday high of 3374.71 on August 14 and the peak before the previous decline of 3362.68, which together form the higher second resistance band. In terms of support, the lower Bollinger band of 3330.13 basically coincides with the intraday low of 3329.79 on August 15. Below it is the low point of 3330.97 after a rapid breakout on August 13. The three together form a "strong support cluster". If they are lost, it means that the short-term rhythm will shift from sideways to downward diffusion.
In terms of momentum indicators, the DIFF of MACD (26129) is -2.13 and the DEA is -2.61, still below the zero axis. However, the DIFF is turning upward and approaching the DEA. The histogram has turned positive to 0.96, indicating that the bearish momentum has clearly converged and there is room for a short-term technical pullback. The RSI (14) is near 43.79 and has not yet left the weak range, indicating that the rebound is mainly for correction. Unless the upper track is broken through with large volume, it is difficult to say that the trend has reversed. From the perspective of the moving average, the price is generally below the main moving average and the moving average is slightly downward. The short-term rebound is more like a retracement of the previous rapid decline. Comprehensive judgment: Before it stabilizes at 3352.68, the market is more likely to follow the box-shaped pattern of "saw-tug near the middle track - retracement of the lower track - and rebound again"; once it effectively breaks through and retracement is confirmed, there is hope for upward movement towards 3362.68/3374.71.
Market Sentiment Observation
The options structure and market dynamics reflect a typical "low-conviction, event-driven" market dynamic. First, while the US dollar index has retreated near 97.90, the reflation narrative fueled by overnight inflation data has not receded, and the upward tail of real and nominal interest rates remains a constraint on gold. Second, equity markets are recalibrating the timing and magnitude of rate cuts, while risk appetite has neither deteriorated significantly nor expanded enough to create a strong risk-off environment. Third, geopolitical events present asymmetric risks with "single-point jumps," making sentiment sensitive to breaking news. Therefore, a turning point in sentiment relies more on two triggers: first, data or speeches leading to a further easing of interest rate expectations; and second, event-based signals of "risk spillover." Absent either of these, gold is likely to remain within its Bollinger Bands, with a narrow range-bound trend and limited volume.
Market Outlook
The short-term (1-3 days) scenario is bullish: If retail sales and sentiment weaken in the evening (below 0.5% and 56.5), while industrial production falls short of "flat," the US dollar and yields retreat, and gold breaks above 3352.68 and consolidates above the middle line, the rebound could extend to 3362.68. Further volume increases could target the upper band resistance of 3374.71. This process will be based on "momentum recovery + mean shift upward," and the MACD is expected to gradually approach the zero axis.
Bearish scenario: If the overall data is stronger than the consensus expectation (retail ≥ 0.5%, core ≥ 0.3%), coupled with the hawkish statements of officials or the lack of positive signals in the meeting, the yield will remain above 4.293% and move upward, and the gold price will be repeatedly frustrated below 3350, and then fall below the horizontal dense area near 3339. It will retest the strong support cluster of 3330.13/3329.79 again; if this cluster is lost, the Bollinger Bands may shift from "convergence" to "lower track expansion", and the short-term target will shift to "mainly lower extension of the band" rather than a simple V-shaped repair.
Event resilience: If there is a "breakthrough" uncertainty in the meeting, the reflexivity of gold will be rapidly amplified. The first thing to observe is not the price range, but the "quality of the breakthrough" (whether it is accompanied by a large volume and whether the backtest confirmation is completed).
The core variables of the medium-term (1-3 weeks) framework remain inflation stickiness and the policy path. If Jackson Hole's neutral message on August 22nd, "inflation is declining, but caution is still required," is released, the market consensus on a 25 basis point rate cut in September and a slower pace this year could be reinforced, and gold prices in the medium term are expected to "rise within the range and make up for any pullbacks." Conversely, if Powell emphasizes the risk of a second wave of inflation and favors "data-dependent and slow rate cuts," real yields will remain high, and gold will continue to "oscillate at high levels and be suppressed on rallies." Until both scenarios are proven false, trading plans should focus on range-bound trading and confirming key levels, rather than betting on unilateral trends.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
