On May 26, the subsequent overall trend of gold hinges on three core factors: first, whether the U.S.-Iran peace agreement can be smoothly implemented; second, whether the current decline in oil prices can be sustained; and third, how the actual monetary policy will be adjusted and implemented under the new Fed Chair Warsh. These three points directly determine the medium- to long-term direction of gold.
Although market sentiment is currently improving due to renewed U.S.-Iran negotiations, the multitude of news stimuli requires a cautious, step-by-step approach. For the short term, it is advisable to wait for the market to gradually digest information, while maintaining an overall bullish outlook based on the positive impact of these developments.
The short-term bullish trend for gold remains intact, but the price action has been characterized by slow, oscillating gains. The morning opening saw another failed attempt to break above the resistance at 4580, reaffirming the view that 4580 serves as the critical pivot point for gold's strength. Therefore, the overall short-term trading strategy remains unchanged today, primarily focusing on entering long positions at lower levels. For the week, gold is still viewed as predominantly bullish.
The key levels to watch on the upside are the 4580, 4600, and 4650 resistance points. The breakthrough of these highs will directly determine the subsequent upside potential for gold prices.
From a technical perspective, gold has repeatedly tested the 4580 resistance level but has failed to break through, indicating strong selling pressure at this level. On the daily chart, the price is currently suppressed below the middle Bollinger Band. A sustained rally above this band, marked by a strong bullish candlestick, is needed to confirm a breakout and open the path toward the 4600, 4650, and 4700 targets for long positions.
On the 4-hour chart, the price action is more straightforward, showing a standard range-bound pattern. The upper Bollinger Band and the 60-period moving average converge precisely at the 4580 level. As long as this resistance holds, a sustained sharp rally or a significant unilateral uptrend is unlikely in the near term.
Therefore, while the overall outlook for gold this week is bullish, short-term optimism should be tempered. Until key resistance levels are breached, the market may continue to experience oscillating fluctuations. Before a clear break above 4580 occurs, it is prudent not to be overly bullish or chase the rally aggressively. Gold is likely to continue consolidating within the 4520-4580 range, and there is even a possibility of a pullback to retest the support zone around 4480-4500.
However, a retest of the previous lows around 4480-4500 would present another favorable opportunity to establish long positions. The current strategy remains focused on entering long positions at lower levels and patiently awaiting a decisive breakout above the 4580 resistance. A confirmed breakout is necessary for sustained and significant upward momentum.
Currently, the market lacks major news catalysts, leading to choppy and frustrating price action. In short-term trading, patience is key. It is advisable to wait for opportunities and execute trades near key support and resistance levels.
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