On Tuesday, May 26, during the Asian trading session, spot gold prices experienced a significant decline from highs near $4580 per ounce. According to reports, the drop was attributed to heightened inflation risks and an attack by the United States in the Strait of Hormuz, which dampened market optimism regarding progress in negotiations to restore traffic through this critical waterway. Fears that these strikes could disrupt peace talks led to a sharp fall of nearly 1% in gold prices, reaching around $4528 per ounce.
Reports from Iran indicated that late on May 25, local time, explosions were heard in multiple coastal areas along the Strait of Hormuz, including Bandar Abbas, Sirik, and Jask in southern Iran, with the situation later described as "under control." Captain Tim Hawkins, a spokesperson for the U.S. Central Command, stated, "U.S. forces conducted a defensive strike today in southern Iran to protect our personnel from threats posed by Iranian forces."
From a daily chart perspective, although the MACD indicator shows a pullback from high levels, the green momentum bars are beginning to shorten, suggesting a weakening of bearish momentum. However, some analysis notes that the MACD remains steadily below the zero line, with the histogram turning slightly green. Various technical indicators collectively reflect a lack of strong bullish momentum in the market, making a continued range-bound movement the most probable scenario in the near term.
On the 4-hour chart, the Bollinger Bands show a clear contraction (with an amplitude of only about $50), and the MACD is close to the zero line but appears poised to form a death cross, indicating diminishing bullish volume and suggesting that a short-term rally remains unlikely. The RSI is below 50, continuing to signal a weak and oscillating trend. Overall, the recommendation for today's gold trading is to adopt a cautiously bearish approach within a range-bound context.
Gold Trading Strategies: Short Position Strategy: Consider selling short in the range of 4553-4555, with a stop-loss at 4576, targeting levels near 4525 and 4507. Long Position Strategy: Consider buying long in the range of 4508-4506, with a stop-loss at 4485, targeting levels near 4540.
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