Gold trading reminder: Gold price rebound is blocked again, or will it continue to target the 100-day moving average?

In early Asian trading, international oil prices fluctuated in a narrow range and are currently trading around $2,384.98 per ounce. As the dollar and Treasury yields rose, gold rebounded on Wednesday and closed at $2,382.85 per ounce, down about 0.29%. Although bets on a September rate cut in the United States and increased geopolitical tensions in the Middle East provide support, it is still necessary to beware of the possibility of gold prices falling to the 100-day moving average support near 2,346.03.

The dollar index rose 0.2% on Wednesday, and the 10-year Treasury yield also rose, which put pressure on gold.

Everett Millman, chief market analyst at Gainesville Coins, said: "I think if economic data shows that recession concerns are justified, then there is a high probability of a correction... Gold could hit a record high in the coming months."

According to the CME FedWatch Tool, last week's weak employment report prompted traders to expect nearly 105 basis points of rate cuts by the end of the year, with a 100% chance of a September rate cut.

Hezbollah leaders pledged on Tuesday to respond "strongly and effectively" to Israel's killing of its military commander last week, regardless of the consequences.

"The market will be looking for confirmation of slowing economic data, especially employment, from Thursday's jobless claims report," said Bart Melek, head of commodity strategy at TD Securities.

Meanwhile, official data on Wednesday showed that China's central bank did not add to its gold reserves for a third straight month in July. This slightly dampened the morale of gold bulls.

In addition, U.S. stocks closed lower on Wednesday, with the Nasdaq index closing down more than 1% as technology stocks fell, triggering market demand for holding cash again, and gold was sold off again.

The major indexes rose at the opening as technology stocks surged, but began to lose momentum in afternoon trading. Investors are still nervous after the recent sharp decline in global stocks.

All three major U.S. indexes closed lower, with losses deepening before the close. The S&P 500 technology sector closed down 1.4%, causing the biggest drag on the benchmark index.

"There's a lot to worry about over the next eight weeks or so, so I expect more volatility," said Peter Tuz, president of Chase Investment Counsel. "I wouldn't be surprised if there's another small sell-off after a few days of gains."

Investors have been concerned about a possible recession in the U.S. and weak earnings forecasts from some of the largest U.S. companies.

The Dow Jones Industrial Average closed down 234.21 points, or 0.6%, at 38,763.45 on Wednesday; the S&P 500 fell 40.53 points, or 0.77%, to 5,199.5; and the Nasdaq fell 171.05 points, or 1.05%, to 16,195.81.

"This dramatic move in the stock market is good stuff, but it's not necessarily ... a harbinger of greater economic disaster, and I don't expect it is," said Joseph Trevisani, senior analyst at FX Street.

Traders on Monday increased bets on Federal Reserve rate cuts, at one point seeing more than 125 basis points of cuts this year, after an unexpected jump in unemployment on Friday.

On Wednesday, traders were pricing in 100 basis points of rate cuts this year, with a 62% chance of a 50 basis point cut in September, a step back from Monday when they saw that as a done deal.

"I think you're going to start hearing people say, hey, let's get a little more detailed on the labor market and really conclude that things are really not collapsing quickly in the U.S.," said Stephen Miran, senior strategist at Hudson Bay Capital.

U.S. Treasury yields rose on Wednesday after the Treasury Department's $42 billion 10-year note auction received weak demand and companies rushed to issue bonds as risk appetite improves.

The main focus this week is on supply, with traders awaiting fresh economic data for further clues on the strength of the U.S. economy.

The winning rate of the 10-year Treasury auction was 3.96%, 3 basis points higher than the yield of the same-year Treasury in the secondary market before the auction. The bid-to-cover ratio was 2.32, the lowest since December 2022.

"Investors are just unwilling to pay for 10-year Treasury bonds with a yield below 4%," said Vail Hartman, U.S. interest rate strategist at BMO Capital Markets in New York. "This suggests that this trend may continue for a while before bargain hunting reappears in a more meaningful way."

A large number of corporate bond issuances also pushed up yields. "A lot of issuers that paused issuance on Monday and maybe even yesterday just to make sure there was more clarity on how risk assets would be received were in the market today," said Michael Lorizio, senior fixed income trader at Manulife Investment Management in Boston.

The rate-sensitive two-year Treasury yield rose 1.8 basis points to 4.0034% late Wednesday after falling as low as 3.654% on Monday, the lowest since April 2023.

The 10-year Treasury yield rose 8 basis points to 3.968% on Wednesday after falling as low as 3.667% on Monday, the lowest since June 2023.

The next important U.S. economic data is the July Consumer Price Index (CPI), which will be released on August 14. Federal Reserve Chairman Powell's speech at the Fed's Jackson Hole Economic Policy Symposium held from August 22 to 24 may also provide new clues on the path of rate cuts. Pay attention to the changes in the number of initial jobless claims in the United States this trading day, and pay attention to the speeches of Federal Reserve officials.

Investors still need to pay attention to news related to the geopolitical situation. The White House said that a ceasefire agreement in the Gaza Strip is close to being reached, but Iran may reassess whether to launch a military attack on Israel.

On August 7, local time, John Kirby, spokesman for the White House National Security Council, said that despite growing concerns about the outbreak of regional war after the assassination of the leader of the Palestinian Islamic Resistance Movement (Hamas), Israel and Hamas are still close to reaching a ceasefire agreement.

According to the US media Politico, US officials said that Iran may be reconsidering whether to launch a multi-pronged attack on Israel. The Biden administration has been working through diplomatic channels in recent days, sending a message to Tehran through various media that if the explosion that killed Haniya did not kill any Iranian citizens, then Iran should reassess its plan to launch a military attack on Israel. US officials said that they did expect Iran to respond in some way to the killing of Haniya, but Tehran seemed to have adjusted its attitude, and the United States did not think Iran would launch an attack on Israel immediately.

In addition, the Russian Ministry of Defense reported on the 7th that the Russian army attacked a Ukrainian refinery that provided fuel for Ukrainian weapons and equipment; the Russian army also attacked a temporary station of foreign mercenaries and several Ukrainian troops, as well as tanks, armored vehicles and other equipment. The Russian air defense system intercepted 11 "HIMARS" rockets and 87 drones. On the same day, the General Staff of the Ukrainian Armed Forces issued a war report stating that Russian aviation activities increased near the border area of ​​Sumy Oblast, and the Russian army dropped about 30 guided bombs in the area that day. In the directions of Kharkov, Toretsk, Pokrovsk and other directions, the Ukrainian army repelled dozens of Russian attacks, and some battles are still ongoing.