Gold prices have maintained a bearish bias for the third consecutive trading session, although further sustained selling pressure has yet to emerge. During early European trading on Tuesday, the price of gold continued to trade within the previous session's broad range, hovering around the 4650 level.
Market hopes for a last-minute agreement between the US and Iran are fading as the deadline set by former US President Trump for Iran to reopen the Strait of Hormuz approaches. This situation reinforces the US dollar's status as the global reserve currency and exerts downward pressure on gold. Additionally, bets that global interest rates will move higher further weigh on non-yielding gold, supporting the outlook for continued price declines.
Following a strong sell-off in March, the gold market has seen a notable reversal over recent weeks. Despite headlines expressing concerns that "gold has peaked," a doji candlestick pattern that appeared on the weekly chart two weeks ago signaled that a change might be brewing. This shift extended further last week, with bulls driving the price up from lows near $4400 to highs around $4800. As the first full trading week of the second quarter gets underway, bulls still have ample room to push prices higher, potentially retesting the key psychological level of $5000.
The most noteworthy signal last week was the formation of "higher lows": support near $4400 held firm and was positioned above the prior week's swing low of $4100. Bears can still find some justification, as resistance in the $4850 zone continues to cap the price—a level that previously acted as support. However, considering the broader trend and longer-term context, the bullish bias currently appears more compelling.
Looking at the daily chart, some trading strategies are becoming clearer. Over the past several months, multiple round-number psychological levels have triggered significant turning points. Notably, the top formed in January occurred precisely near the $5600 level. The initial pullback from that peak found support at $4400, and the subsequent rebound rallied by $1000 to test $5400.
During March's decline, the price stalled or rebounded near $4500 and $4100, while $4600 and $4800 acted as resistance. This has shaped the current technical structure: support has been confirmed around $4600, demonstrating the classic "resistance-turned-support" dynamic and reflecting a short-term bullish structure—marked by higher lows following recent higher highs.
On shorter timeframes, price references near round-number levels become even more pronounced. Last week, gold encountered resistance near $4800, and so far this week, the $4700 level has shown supportive characteristics. Earlier last week, support emerged near $4500, leading to a rebound that retested $4600 before breaking higher.
Currently, a break above $4700 would open the path for a retest of $4800. While trading activity around $4900 has been relatively light so far, it would represent the next resistance level for further gains. Beyond that, a retest of the $5000 mark remains a key focal point on longer-term charts.
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