Gold prices surged to $4,200 before fluctuating and falling back, with increasing divergence between bulls and bears.
2026-07-06 13:11:31
Spot gold (XAU/USD) surged in Asian trading on Monday but failed to maintain its gains. The price briefly touched a near two-week high above $4200 before retreating slightly and maintaining a consolidation pattern. Overall, gold prices remain in a high-level consolidation phase after a strong upward move, with bulls and bears clearly locked in a tug-of-war in the current range.
Regarding the US dollar, geopolitical risks remain one of the core short-term drivers. The ongoing uncertainty in the Strait of Hormuz has led the market to re-induce energy and transportation risk premiums, driving a temporary return of funds to safe-haven assets like the US dollar, thus putting some downward pressure on gold. However, the upside potential for the dollar has not fully materialized, mainly due to weak US employment data, which has significantly cooled market expectations for the Federal Reserve to maintain high interest rates or even continue raising them.
Interest rate futures pricing has shifted from a previously hawkish path to an expectation range of only 0-1 rate hikes this year. This change has significantly weakened the dollar's continued upward momentum, thereby limiting the downside potential for gold.
Meanwhile, the medium- to long-term support for gold remains solid. The continued increase in gold reserves held by global central banks is a significant structural factor. Data from the World Gold Council shows that most central banks expect to continue increasing their gold holdings over the next year, while a report from the European Central Bank indicates that gold's share of global reserves has surpassed that of US Treasury bonds. Furthermore, the People's Bank of China's continued increase in gold reserves for several months has reinforced the market's allocation logic for gold as a long-term reserve asset.
Against this backdrop, gold is simultaneously affected by both short-term support from the safe-haven dollar and medium- to long-term support from central bank buying, resulting in a high-level consolidation rather than a trend reversal.
In the short term, market focus will be on the US ISM Services PMI and speeches by Federal Reserve officials, which will determine the short-term direction of the US dollar. If economic data continues to weaken, gold is expected to regain upward momentum; conversely, strong data could strengthen the dollar's rebound and suppress gold prices.
From a daily chart perspective, gold continued its upward trend after breaking out of its previous consolidation range, maintaining an overall bullish structure. After forming a temporary high above $4200, the price entered a consolidation phase, but no clear trend reversal signals emerged. The moving average system remains in a bullish alignment, indicating that the overall trend remains strong.
From a 4-hour chart perspective, gold accelerated its upward movement after breaking through the 100-period moving average and successfully broke through the 23.6% Fibonacci retracement level. It is currently consolidating at higher levels. The RSI indicator remains above 60, indicating that bullish momentum still dominates but is beginning to cool. The MACD remains in positive territory, but the red bars are gradually converging, suggesting that short-term momentum is slowing.
Key support levels are concentrated around the 23.6% Fibonacci retracement level near $4150, with the 100-period moving average around $4120 forming a significant support zone. A break below this level could lead to a further retracement to the structural support area around $3950. On the upside, the first resistance level to watch is the 38.2% Fibonacci retracement level near $4300, followed by resistance at $4415 and then the $4527 range. A break and hold above these higher retracement levels could extend the resistance to $4680 or even the previous high area.
The overall technical structure indicates that gold is in a high-level consolidation phase after an upward trend. Momentum remains but the pace is slowing, and the market is waiting for new macroeconomic drivers to confirm the next direction.
Editor's Summary : The current gold price movement is essentially the result of a tug-of-war between short-term demand for a safe-haven dollar and medium- to long-term expectations of monetary easing and central bank gold purchases. Geopolitical risks support a temporary strengthening of the dollar, but cooling interest rate expectations limit its continued rise, thus keeping gold prices fluctuating at high levels. In the short term, gold prices are more likely to consolidate within the $4100-$4300 range, awaiting further guidance from US economic data and Federal Reserve policy signals. In the medium term, if the interest rate cycle peaks and central bank gold purchases continue, gold still has a basis for further upward movement; however, if the dollar strengthens again due to resilient data, a deep correction in the short term cannot be ruled out. Overall, the market is in a high-level rebalancing phase after a strong trend.
Regarding the US dollar, geopolitical risks remain one of the core short-term drivers. The ongoing uncertainty in the Strait of Hormuz has led the market to re-induce energy and transportation risk premiums, driving a temporary return of funds to safe-haven assets like the US dollar, thus putting some downward pressure on gold. However, the upside potential for the dollar has not fully materialized, mainly due to weak US employment data, which has significantly cooled market expectations for the Federal Reserve to maintain high interest rates or even continue raising them.
Interest rate futures pricing has shifted from a previously hawkish path to an expectation range of only 0-1 rate hikes this year. This change has significantly weakened the dollar's continued upward momentum, thereby limiting the downside potential for gold.
Meanwhile, the medium- to long-term support for gold remains solid. The continued increase in gold reserves held by global central banks is a significant structural factor. Data from the World Gold Council shows that most central banks expect to continue increasing their gold holdings over the next year, while a report from the European Central Bank indicates that gold's share of global reserves has surpassed that of US Treasury bonds. Furthermore, the People's Bank of China's continued increase in gold reserves for several months has reinforced the market's allocation logic for gold as a long-term reserve asset.
Against this backdrop, gold is simultaneously affected by both short-term support from the safe-haven dollar and medium- to long-term support from central bank buying, resulting in a high-level consolidation rather than a trend reversal.
In the short term, market focus will be on the US ISM Services PMI and speeches by Federal Reserve officials, which will determine the short-term direction of the US dollar. If economic data continues to weaken, gold is expected to regain upward momentum; conversely, strong data could strengthen the dollar's rebound and suppress gold prices.
From a daily chart perspective, gold continued its upward trend after breaking out of its previous consolidation range, maintaining an overall bullish structure. After forming a temporary high above $4200, the price entered a consolidation phase, but no clear trend reversal signals emerged. The moving average system remains in a bullish alignment, indicating that the overall trend remains strong.
From a 4-hour chart perspective, gold accelerated its upward movement after breaking through the 100-period moving average and successfully broke through the 23.6% Fibonacci retracement level. It is currently consolidating at higher levels. The RSI indicator remains above 60, indicating that bullish momentum still dominates but is beginning to cool. The MACD remains in positive territory, but the red bars are gradually converging, suggesting that short-term momentum is slowing.
Key support levels are concentrated around the 23.6% Fibonacci retracement level near $4150, with the 100-period moving average around $4120 forming a significant support zone. A break below this level could lead to a further retracement to the structural support area around $3950. On the upside, the first resistance level to watch is the 38.2% Fibonacci retracement level near $4300, followed by resistance at $4415 and then the $4527 range. A break and hold above these higher retracement levels could extend the resistance to $4680 or even the previous high area.
The overall technical structure indicates that gold is in a high-level consolidation phase after an upward trend. Momentum remains but the pace is slowing, and the market is waiting for new macroeconomic drivers to confirm the next direction.
Editor's Summary : The current gold price movement is essentially the result of a tug-of-war between short-term demand for a safe-haven dollar and medium- to long-term expectations of monetary easing and central bank gold purchases. Geopolitical risks support a temporary strengthening of the dollar, but cooling interest rate expectations limit its continued rise, thus keeping gold prices fluctuating at high levels. In the short term, gold prices are more likely to consolidate within the $4100-$4300 range, awaiting further guidance from US economic data and Federal Reserve policy signals. In the medium term, if the interest rate cycle peaks and central bank gold purchases continue, gold still has a basis for further upward movement; however, if the dollar strengthens again due to resilient data, a deep correction in the short term cannot be ruled out. Overall, the market is in a high-level rebalancing phase after a strong trend.
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