Gold prices experienced a sharp decline on Wednesday, opening with a rapid surge to a high of $4,449 per ounce before a swift reversal. The rebound was weak before midday, and short positions were entered near $4,410. By the US session, the metal fell to the $4,450 area, allowing short positions to close near $4,460 for a significant profit. The day ended at $4,350, forming a large bearish candlestick on the daily chart.

On Friday, the market is digesting a split narrative from officials. Cleveland Fed's Hammack stated outright that "rates must rise now," while Barkin echoed that "more hikes may be needed to achieve goals." However, US July PPI data came in at 4.7% year-on-year (below the 4.9% forecast) and 0% month-on-month, with core PPI also missing expectations, signaling cooling upstream inflation. Additionally, initial jobless claims at 209,000 were slightly above estimates, indicating a softening labor market.

The market remains conflicted. Interest rate futures have reduced the pricing of a full rate hike this year to around 23 basis points, with the probability of a September hike fluctuating between 34% and 40%. This combination of "hawkish officials + dovish data" often triggers a sell-off in gold from profit-taking at elevated levels, which played out overnight.

Looking ahead, focus is on the 20:30 release of US July retail sales (expected +0.3% month-on-month, prior +0.2%) and the University of Michigan consumer sentiment index at 22:00. Friday's data-heavy session could see major players use the figures to trigger stops, making this the most critical time to watch today.

Where to start

From a technical perspective, the daily chart shows a long upper shadow after a sharp rally, with the MACD's red bars shrinking and price retesting the 5-day moving average. This is a "pullback within an uptrend" rather than a reversal, but blindly buying is not advisable today. The price has fallen below the middle Bollinger Band after the $4,449 drop, with the bands narrowing, and the Asian session is likely to range between $4,320 and $4,380. Short-term bearish momentum has been exhausted. The key level above is $4,360, which is a pivotal point for bullish/bearish bias, while support is at $4,300.

Why just 10 ASX 200 shares?

Gold is not a market to rush. US-Iran negotiations remain a tug-of-war, and oil price volatility and dollar movements could trigger short-term shocks. This week's "big tests" of data are over, and gold has performed well. Friday is not a day to rush to "hand in the test paper"; let the market stabilize before next week's trading.

For intraday operations, the recommendation is to go long at $4,310-$4,308, with a stop loss at $4,299, targeting $4,380-$4,400. A break below $4,300 would prompt a reversal to short, targeting $4,250-$4,230.

Key economic data and events to watch today: Friday, August 14, 2026, at 20:30 US July retail sales month-on-month; 22:00 US August one-year inflation rate expectations initial value; 22:00 US June business inventories month-on-month; 22:00 US August University of Michigan consumer sentiment index initial value.