July 19 Golden Week commentary: the US-Iran conflict layered with hawkish pressure suppresses prices; gold falls back below the 4,000 mark

Last week opened with a gap down; gold jumped directly from $4,119 to $4,098. Then on Monday that day it fell by $117. This week the low dropped to $3,959. As of Friday’s close, spot gold was $4,016, with an overall stepped-down decline.

Since March, the US-Iran situation has repeatedly pulled back and forth. Shipping in the Strait of Hormuz has often been disrupted, causing sharp swings in international energy prices. Notably, the market currently is more inclined to trade the logic chain of “energy inflation—monetary tightening,” which in turn exerts an implicit drag on gold prices.

The US 6月 CPI released last week showed inflation cooling somewhat, briefly triggering a rebound in gold. However, Fed Chair Powell reiterated a “zero tolerance” stance on inflation, clearly committing to pushing inflation back into the 2.0% target range. Against the backdrop of inflation still staying elevated (around 3.5%), the market is betting that the Fed will maintain restrictive rates for longer. Rising real-rate expectations keep weighing on gold, which offers no yield.

The core contradiction in gold prices is the game between “high inflation—strong USD/high rates—gold valuation reset.” If the US-Iran standoff continues into the US midterm elections (around November), inflation persistence may further strengthen a hawkish policy tone.

From the price action structure, gold is in a falling channel, with lows being refreshed one after another, and market focus is gradually shifting lower. Personally, I suggest watching around 3,880. That level corresponds to a dense trading area from the late October to early November period last year, where there is phased technical support. If the bearish move extends into next week, it’s not ruled out that price could drift lower on inertia and test new lows.

The “litmus test” for a short-term rebound is in the 4,040—4,080 area. Only by regaining and holding that range can the recent sell-pressure ease.

For friends accumulating gold next week, my personal suggestion is to buy in small amounts in batches when it makes new lows. I don’t recommend going all in for a one-shot bet. Accumulating gold is a long-term investment; everyone doesn’t need to rush in just because gold rises, or worry and get anxious and upset if it drops. Our main idea remains to buy low and sell high. For those trading spot gold/London gold, my personal suggestion is to sell short on rallies rather than chase. Next week, focus on resistance around 4,040—4,080!

The above analysis is for reference only and does not constitute any investment advice. Financial markets are volatile, and investing involves risk—proceed with caution when entering the market. $XAU