Gold prices plummet sharply, with attention focused on the 100-day moving average support level

The gold market experienced a ‘Black Wednesday,’ with spot gold prices falling by over 1.5% in a single day, hitting a low of 3,268.02 USD/oz during trading, marking the lowest level since 30 June. The Federal Reserve's decision to keep interest rates unchanged, Powell's hawkish remarks dampening expectations of rate cuts, and the release of better-than-expected U.S. economic data collectively created a ‘perfect storm’ driving gold prices lower. Meanwhile, the U.S. dollar index surged by approximately 1%, reaching its highest level since 29 May at 99.99, further intensifying pressure on gold. On Thursday (31 July), during Asian morning trading, spot gold prices rebounded slightly, currently trading around 3,281.76 USD per ounce. Investors will also monitor developments in international trade relations and U.S. June PCE data, with the non-farm payrolls report set to be released on Friday.

Gold Market Outlook: Opportunities in a Correction?

Despite the recent sharp decline in gold prices, market analysts remain cautiously optimistic about the long-term outlook for gold. Tai Wong notes that while gold prices may face further corrections, the core logic of the gold market—global economic uncertainty, high U.S. debt levels, and the trend toward de-dollarisation—remains intact. These factors could attract buyers when gold prices reach the bottom of the range. Currently, gold prices have hit a low near 3,268 USD/oz, approaching the key technical support level of the 100-day moving average (currently around 3,267), and may continue to face pressure in the short term. However, long-term investors may view the correction as a buying opportunity.

From a technical perspective, after breaking below 3,300 USD/oz, the short-term target for gold prices may be around 3,250 USD/oz (the low on 30 June was 3,247.87 USD/oz). If prices continue to decline, 3,200 USD/oz will be a key psychological threshold. Conversely, if the Federal Reserve signals more explicit rate cuts in the future or global geopolitical risks escalate further, gold prices may rebound swiftly and return above the 3,300 USD/oz level.