During early Asian trading on Friday (July 17), spot gold edged lower, trading near $3,973.60 per ounce and touching a two-week low. Yesterday, spot gold prices fell sharply by 2% to close at $3,976.26 per ounce, marking a new two-week low; US gold futures also retreated 1.5%, settling at $3,992.10. This decline was driven by a combination of factors, including a sharp escalation in Middle East tensions, rising expectations of Federal Reserve rate hikes, and a strengthening US dollar. As a non-yielding asset, gold's appeal is being significantly undermined by an environment of high yields and concerns over inflation.

Overall, this sudden drop in gold prices serves as a reminder to the market that the performance of safe-haven assets is inextricably linked to the macroeconomic environment. Gold is likely to face continued volatility until the Federal Reserve's policy path and the trajectory of the Middle East conflict become clearer.

On the daily chart, spot gold closed yesterday with a large bearish candle, decisively breaking below the psychological $4,000 mark and the lower boundary of the previous consolidation range. Short-term moving averages (5, 10, and 20-day) are aligned in a bearish formation, and the MACD shows expanding bearish momentum below the zero line. The RSI has dropped toward 30, entering oversold territory without showing significant divergence, confirming an overall bearish structure.

On the 4-hour chart, despite data showing a cooling of inflation, the impact on gold prices has been limited—particularly given the renewed severity of US-Iran tensions. Last night, the price breached the critical $4,000 support level, hitting a recent low, with the next target likely lying below $3,900. Moving averages are now turning sharply downward, exerting downward pressure, and the MACD indicator is poised to form another "death cross" below the zero line. Consequently, the recommended trading strategy is to focus on selling rallies for the time being. Resistance: 4000-4010-4020; Support: 3985-3970-3960.

Disclaimer: The article is contributed by the market analyst from Binkex market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.