On Tuesday, April 29th, we noted that due to geopolitical uncertainties and the impending Federal Reserve interest rate decision, market sentiment was turning cautious, putting pressure on gold prices and leading to range-bound, consolidative movement. Short-term volatility was gradually contracting, placing gold at a crossroads in a tug-of-war between bulls and bears. Furthermore, short-term technical indicators suggested a continued risk of a price decline. Consequently, for trading strategies, we recommended watching resistance levels at $4730 and $4770, while monitoring support levels at $4657 and $4600.
Subsequent price action showed that after opening during the Asian session on Tuesday, gold experienced a minor rebound, encountering resistance around $4701. Subsequently, prices came under pressure and declined, moving lower in a step-like pattern during the short-term session. Support levels near $4657 and $4600 were successively broken, with the price hitting a low of $4554 before stabilizing. After the US market opened, gold fluctuated and recovered, meeting resistance again around $4601. It is currently trading near $4596, continuing to test the key $4600 resistance level in the short term. Overall, gold is facing downward pressure from multiple bearish factors, leading to continued short-term declines, which aligns with our assessment of ongoing downside risk.
Analysis suggests that gold's pressured and oscillating trend is primarily influenced by three key bearish factors. First, the Middle East situation remains deadlocked; although a ceasefire holds, the prospects for a new round of negotiations are unclear. Iran's new proposal has failed to meet the core demands of the United States. Concurrently, a sustained rebound in oil prices is exacerbating inflation concerns, reinforcing expectations that major central banks will maintain higher interest rates for longer. Second, the Federal Reserve's interest rate decision scheduled for early Thursday is a focal point. Markets anticipate the Fed will hold rates steady. However, elevated oil prices intensifying inflationary pressures have strengthened expectations that the Fed will keep rates higher for an extended period, which diminishes gold's appeal as a non-yielding safe-haven asset. Third, technical momentum remains weak. Gold has repeatedly faced rejection around the $4850-$4900 zone in prior attempts to rally, with its overall price center consistently shifting lower, indicating a trend of downward movement.
On the daily chart, after encountering resistance during rebounds, gold's price action shows consolidation under pressure, with signs of an accelerating decline in short-term fluctuations. For resistance, focus lies on whether the price can break above the key $4600 level, which it tested multiple times during Tuesday's US session and again at the open today without success. Further resistance is seen near last week's low of $4657, followed by the $4700 level, which is also near Monday's high. For support, watch Tuesday's low of $4554, and then the psychological $4500 level. Technical indicators present a mixed short-term picture: the 5-day moving average and MACD show a bearish crossover pointing downwards, the KDJ indicator shows a bearish crossover but is turning up slightly, and the RSI's bearish momentum is slowing. This suggests a continued risk of decline, though a temporary rebound in the short term is possible.
Intraday outlook for gold: Influenced by multiple bearish factors, gold's short-term trend is likely to remain under pressure and oscillate until the Fed's decision on Thursday. A range-trading approach is recommended. Monitor the resistance at the $4600 level for a potential break, followed by $4657 and $4700. On the downside, watch support at $4554 and then $4500.
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