Gold Shows Dangerous Signal Again After 103 Trading Days; Beware Tonight's CPI May Become the "Correction Trigger"

　　Source: Jintou Data

　　Gold's recent strong rebound has begun to enter a historically rare technical range. Bespoke Investment Group pointed out that after more than 100 trading days without an overbought reading, gold has re-entered this state last week,

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　　Since August, gold futures prices have risen by nearly 9%. Last week, amid weaker-than-expected US non-farm payroll data and market hopes for the reopening agreement of the Strait of Hormuz, gold prices climbed to the highest level since June, rising more than 7% for the week, marking the biggest one-week gain since January.

　　This rally also propelled gold prices back above the 50-day moving average. According to Bespoke data, the gold closing price last Friday was already a full standard deviation above the 50-day moving average.

　　More notably,

. Previously, .

　　"This is one of the longest streaks without an overbought reading on record," Bespoke said in a report on Monday.

　　The institution's historical data show that when gold has gone more than 100 trading days without entering the overbought zone and then closes back in that range, subsequent returns tend to be negative.

　　In previous cases meeting this condition, the average return for gold a week later was a decline of 0.22%, after one month a decline of 0.34%, and after three months a decline of 0.53%.

　　Over a 12-month horizon, the average decline in gold widened further to 0.62%, representing the largest average loss in these historical cases.

　　Bespoke also found that in such historical cases, gold produced a positive return after one year only 37% of the time.

　　

　　Gold's short-term fate may depend on the US CPI inflation report

　　As the US July CPI is set to be released on Wednesday evening, the relationship between gold and inflation data is becoming especially crucial. The recent uninterrupted rise in gold prices has approached a long-term trend line that has lasted a decade, while also entering the overbought zone. This means that

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　　In recent weeks, gold prices have risen above the $4,000-per-ounce support level. With growing global demand, especially from China, the price increases have provided a solid footing and reignited investor interest in precious metals. On the Wednesday Asian session,

edged higher, breaking through the 100-day moving average once again, a milestone first reached earlier this week.

　　Currently,

If the US CPI comes in significantly above expectations, strong inflation could trigger a technical correction and bring the recent short-term gains into a retracement phase.

　　Ole Hansen, Head of Commodity Strategy at Saxo Bank, said in a report: "The macro backdrop has become more favorable, but remains fragile." He added: "A weaker dollar and lower expectations for further Fed tightening have helped precious metals, but if inflation pressures rise again, oil prices spike, or US data strengthens, rate hike expectations could quickly be revived."

　　Hansen pointed out, "Gold has halted its downward trend, but a new bullish upswing is yet to be confirmed. The area around $4,200 is becoming increasingly important, while the main upside test once again centers on the 200-day moving average, which currently sits just below $4,500."

　　TD Securities stated, "Precious metals maintain a buying tone," and gold "has held on to its gains even as oil prices and interest rates continue to climb, with CTAs maintaining long positions above $4,400 per ounce."

　　The institution further noted, "Recent price action continues to indicate a growing theme of stagflation in the gold market," adding that while "inflation data and Fed pricing remain closely watched,

."

　　Analyst Razan Hilal pointed out that in the current context, how traders interpret CPI and adjust their expectations for Fed policy will more directly impact gold's trajectory than the data itself. Given that gold prices are already in significantly overheated territory, any change in interest rate expectations could quickly shift short-term bullish and bearish forces.

　　However, he believes that even so, a single inflation report is not enough to break gold’s larger upward structure. "Therefore,

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Editor: Zhu Henan