On April 29, the international precious metals market experienced downward pressure, with spot gold falling to $4,597 per ounce, marking its lowest level in nearly a month. The strengthening U.S. dollar and rising oil prices were identified as the primary factors suppressing gold, while investors turned their attention to a series of central bank interest rate decisions scheduled for release this week. A higher U.S. dollar index increased the cost of holding gold for overseas buyers. Concurrently, as a major energy exporter, the United States is viewed as a safe-haven asset amid oil price shocks, further enhancing the dollar's appeal.
From a fundamental perspective, elevated oil prices have intensified market concerns about inflation. High oil prices could increase the likelihood of central banks raising interest rates or maintaining tight monetary policies, placing dual pressure on gold, a non-yielding asset. Meanwhile, the persistent strength of the U.S. dollar against a basket of major currencies has diminished gold's short-term appeal. Technical profit-taking and position adjustments have also contributed to the decline in gold prices.
On the policy front, at least ten central banks are expected to announce interest rate decisions this week. The Bank of Japan has already kept its short-term interest rates unchanged, but its outlook was perceived as hawkish, with dissenting votes reaching a multi-year high. The interest rate policies and communication from various central banks will serve as crucial guidance for short-term movements in the gold market. Investors should closely monitor policy biases and changes in economic projections to gauge market liquidity and risk appetite.
From a technical standpoint, gold's short-term support near $4,600 remains solid. Despite evident near-term downward pressure, long-term safe-haven demand, alongside geopolitical and energy price uncertainties, continues to provide underlying support for gold. This suggests the current adjustment is primarily due to position rebalancing rather than a trend reversal. Investors with medium to long-term investment horizons may consider accumulating positions at key support levels.
In summary, if the U.S. dollar maintains its strength and central banks adopt a hawkish stance, gold may continue to trade within a range or face further declines. Conversely, if oil price volatility intensifies or policy statements turn dovish, gold prices could rebound quickly and resume their structural upward trend. Investors are advised to closely monitor central bank decisions and energy price movements, manage risks prudently, and identify potential allocation opportunities.
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