On Wednesday (May 20), international gold prices opened lower but then rose, fluctuating to reclaim the $4500 mark, with the daily candlestick chart showing a small bullish pattern. Amid an unclear backdrop of both fundamental and technical signals, the gold price continues to oscillate around the key $4500 level.
On the fundamental side, regarding regional conflicts, U.S.-Iran negotiations remain stalled, and the continued blockade of the Strait of Hormuz keeps the geopolitical risk premium for crude oil high, which has not provided significant support for gold prices.
In terms of monetary policy, the minutes from the Federal Reserve meeting indicate increased divergence among voting members, with an overall policy stance leaning towards tightening, which has also exerted downward pressure on gold. The minutes revealed that, in response to rising inflation risks, several Fed officials emphasized the need to be vigilant about a potential rebound in inflation and mentioned interest rate hike options, with only a few officials leaning towards a more accommodative stance. Notably, the April Fed meeting was the second consecutive one where more policymakers suggested that if inflation persists above target, interest rate hikes might be appropriate. In an environment where expectations for rate hikes are gradually strengthening, gold prices remain generally weak.
Additionally, regarding the U.S. dollar's movement, the dollar index remains relatively strong, supported by monetary policy expectations, continuing to weigh on gold prices. In this context, Goldman Sachs recently maintained its year-end gold price target forecast but explicitly highlighted significant short-term downside risks. Goldman even warned that if tensions in the Strait persist and are coupled with stock and bond market corrections, gold could face greater selling pressure.
Overall, the fundamental outlook for gold in the short term remains bearish. The Middle East situation remains volatile but fails to provide substantial safe-haven support, hawkish statements from the Fed dominate financial markets, and falling oil prices have weakened inflation support. As a result, gold prices continue to exhibit a weak pattern, with limited room for a rebound.
From a technical perspective, the weekly candlestick chart shows that since April, gold prices have been fluctuating around the middle Bollinger Band, failing to break above it for three consecutive weeks before ultimately declining again. The medium-term technical target is near the lower Bollinger Band around $4200, with short-term focus on the $4385 level.
On the daily candlestick chart, after this month's rebound was halted around the $4800 level, gold prices have once again entered a downward phase. The current price remains locked in a struggle around the $4500 key level. Following a continuous decline within the dynamic downward channel formed by the 5-day moving average and the lower Bollinger Band, although gold prices halted their decline near the lower Bollinger Band yesterday and showed signs of breaking above the resistance of the 5-day moving average, technical indicators still reflect a bearish state, indicating that gold prices are likely to maintain their weak pattern in the near term. The key intraday focus remains the $4560-$4500 core fluctuation range, awaiting further price breakthroughs.
In summary, gold prices are currently still in a fluctuating downtrend from the high of $4773. Although there is volatility around the $4500 mark, the downward trend has not clearly ended, and there remains a possibility of further declines towards the $4500 level in the future.
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