On May 20th: In the previous trading session on Tuesday, May 19th, international gold prices encountered resistance, retreated, and closed lower. Former President Trump's remarks about potentially having to strike Iran again, along with mediators indicating minimal progress in U.S.-Iran negotiations and Iran holding firm on its core demands, once again supported oil prices and heightened inflation concerns. Concurrently, Federal Funds futures indicated a 75% probability of the Federal Reserve raising interest rates by year-end. This pressured gold prices, erasing the gains from Monday's rebound from lows and allowing bearish forces to maintain dominance, suggesting gold will continue to await a retest of the 200-day moving average support level, which could then trigger a potential rebound demand.
In specific price action, gold opened the Asian session at $4567.53 per ounce, briefly strengthened to record an intraday high of $4588.78, then encountered resistance and fell persistently. The European session saw sideways consolidation, while the U.S. session experienced consecutive drops, touching an intraday low of $4464.95. Although prices rebounded from this level, they ultimately weakened again, closing at $4481.62. The daily range was $123.83, with a closing loss of $85.91, representing a 1.88% decline.
Looking ahead to Wednesday, May 20th: International gold opened with narrow fluctuations but continues to face pressure, remaining in a downtrend. No supportive fundamental catalysts have emerged. Crude oil prices are positioned above their middle Bollinger Band and short-term moving averages, indicating a strong rebound bias. The U.S. Dollar Index also maintains expectations for further recovery. Overall, these factors are bearish for gold. Therefore, for gold prices, a continued bearish view is maintained, awaiting a touch of the 200-day moving average support.
However, the strength of any potential rebound is expected to differ from previous instances. Given the current dominance of bearish fundamental factors—such as the U.S.-Iran stalemate, unresolved Strait tensions, and heightened expectations for Fed rate hikes—these are difficult to reverse. A rebound would also struggle to break through the $4700 resistance level.
While it is true that global geopolitical uncertainty, continued central bank gold purchases, de-dollarization trends, and potential economic slowdown risks provide structural support for gold, and while surging oil prices and an energy crisis could ultimately drag on economic growth, forcing central banks to pivot back to accommodative policies and potentially restarting a new bull market for gold, these are longer-term supportive factors. They are unlikely to alleviate short-term pressure and the significant need for a correction.
This environment could easily force out holders with higher-cost positions, with a renewed bull trend only resuming after such positions are cleared. Therefore, the current market is not merely a contest of psychology but also a battleground for retail and speculative investors. This gold bull market has demonstrated that even in a bull market—even one that is not yet over—those holding long positions can still incur losses.
For the next entry point, one should either wait for a touch below the $4000 mark to capture a low, or follow the trend once prices move back above $4800. Fundamentally, re-entry could be considered if the U.S.-Iran situation reaches a lasting ceasefire, Strait passage is secured, or the interest rate hike outlook weakens.
Technically, on the monthly chart, the gold price is below the 5-month moving average, indicating weakness. A monthly close below the 10-month moving average support at $4370 could pave the way for a further decline towards $4100 or even the $3800 mark. Conversely, a monthly close back above the 5-month moving average at $4800 could signal the restart of a bullish bull market.
On the weekly chart, the price is currently trading below the middle Bollinger Band, the 5- and 10-week moving averages, and the 30-week moving average. Oscillators also maintain bearish signals, indicating weakness and suggesting a potential short-term decline towards $4385, or even a $4100 target.
On the daily chart, after encountering resistance at the 100-day moving average, the recent overall trend has been a downward shift, forming a new descending channel. The current focus remains on the 200-day moving average support for a potential bullish rebound. If a rebound fails to break through the resistance of the 60-day moving average, prices could turn lower again, breaking below the 200-day moving average and potentially falling further towards the $3900 area.
For specific real-time trading guidance, please refer to live account information.
Preliminary intraday operational level references are provided below. Specific entry and exit points are subject to real-time account notifications: Gold: Support levels to watch: around $4450 or $4400; Resistance levels to watch: around $4530 or $4560. Silver: Support levels to watch: around $72.70 or $71.50; Resistance levels to watch: around $76.20 or $77.60.
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