On Tuesday, May 6, our analysis suggested that escalating Middle East tensions were driving up oil prices and inflation expectations, compelling the Federal Reserve to maintain higher interest rates for a longer period, thereby directly pressuring gold prices. Meanwhile, short-term technical indicators pointed to a potential rebound in gold, although the overall trend remained weak. Consequently, our operational advice was to monitor key support levels: the primary support at $4,500, with a break below targeting $4,400, and resistance at $4,560. A stabilization above this level could lead to further rebounds towards $4,600 and $4,660.
Subsequent market movements showed that during Tuesday's European session, gold continued its rebound from earlier, rising to encounter resistance at $4,586 after the U.S. market opened. The price then fluctuated lower, hitting a low of $4,551 at the close. On Wednesday, gold opened with a slight decline before rapidly surging, breaking through Tuesday's high and continuing its strong performance. It successively surpassed resistance near $4,600 and $4,660, reaching a peak of $4,715, and is currently trading around $4,711, demonstrating significant short-term strength. Overall, the rebound following gold's stabilization above the key $4,500 level has been more robust than initially anticipated.
A Wolfinance star analyst noted that recent significant disagreements in U.S.-Iran talks, coupled with continued U.S. naval blockades against Iran, have kept oil prices volatile at high levels. This has exacerbated inflationary pressures, leading to a hawkish stance from the Fed and prolonged high interest rates, which suppressed gold prices over the past month. On Monday, the U.S. initiated a "Freedom Plan" to guide commercial ships through the strait, which was met with a military response from Iran. The plan was urgently halted by Trump the following day, creating a breathing space for negotiations. However, persistent避险demand and risks of renewed large-scale conflict kept tensions high. This led to a lower opening for oil prices on Wednesday, supporting gold's rebound. Subsequently, reports emerged that the U.S. and Iran are close to a one-page memorandum of understanding aimed at ending the war, easing Middle East tensions. Oil prices plunged sharply during Wednesday's session, underpinning a substantial single-day rally in gold. Looking ahead, if Middle East tensions further ease and oil prices continue to decline, gold is expected to maintain its upward trajectory.
On the daily chart, gold stabilized and rebounded after hitting a one-month low, recovering nearly half of its previous losses, indicating relative short-term strength. Key support levels to watch include last Friday's high of $4,660, a level that held firm during multiple tests before the breakdown, followed by the integer level of $4,600. Resistance can be observed near the 5-week moving average at $4,725, which gold is currently approaching, and further at the $4,800 integer level, near the weekly Bollinger Band midline. The 5-day moving average and MACD indicator are turning upward from a death cross, showing signs of forming a golden cross, while the KDJ and RSI indicators have formed bullish crosses. Short-term technical signals suggest potential for further gold appreciation.
Intraday gold outlook: Easing Middle East tensions and a sharp drop in oil prices are supporting the rise in gold. Trading strategy recommends a range-trading approach, with support monitored at $4,660 and $4,600, and resistance focus on the breakout situation near $4,725, with further gains targeting $4,800.
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