On April 1, gold continued its upward trajectory, opening higher during the Asian session and successively breaking through the 4500 and 4600 thresholds. However, a portion of the gains was relinquished during the afternoon session. The price subsequently consolidated around 4550 before resuming its climb during the U.S. session. After firmly re-establishing above 4600, long positions were initiated, yielding significant gains by the evening. The session concluded with gold settling at $4668, marking the third consecutive positive close.
On Wednesday, April 1, former U.S. President Donald Trump indicated that conflict with Iran could conclude within "two to three weeks," suggesting a potential agreement might be reached beforehand. This expectation of de-escalation has bolstered risk appetite. While a reduction in safe-haven demand typically pressures gold, the metal's concurrent rise suggests the market is currently more focused on interest rate dynamics, which are providing short-term support.
It can be argued that both the U.S. and Iran have signaled a willingness to ease tensions, with signs of the conflict cooling. However, substantive negotiations have not yet commenced, and significant differences remain regarding core demands, implying ongoing uncertainty. Furthermore, the deployment of the USS George H.W. Bush aircraft carrier to the Middle East, with the U.S. Defense Secretary noting that the conflict's direction will be determined in the coming days, underscores that risks persist. Therefore, the prevailing trend for gold remains supportive.
From a technical perspective, following yesterday's strong bullish close, there is room for further upward movement towards the 20-day moving average. However, analysis of the hourly chart indicates potential resistance in the 4720-4730 zone. Additionally, with gold having risen for three consecutive sessions, any further advance is heavily contingent on continued weakness in the U.S. dollar. Consequently, short-term targets are seen testing 4730 and 4800. However, caution is warranted later in the week as economic data could potentially trigger a U.S. dollar rebound, thereby pressuring gold prices.
In summary, while the current rebound is robust, the consecutive strong gains suggest a potential for a technical correction, making it inadvisable to chase the rally at elevated levels. The key short-term variable will be the ADP employment data released tonight. This data has the potential to cause significant volatility; weaker-than-expected figures could propel gold further upward, while strong data might trigger a pullback.
Today's trading recommendations are as follows: Gold: Consider short positions in the 4700-4710 range, with a stop loss above 4720, targeting 4600-4550. A decisive break above 4730 could warrant long positions targeting 4800-4850.
Key economic data and events to watch today, Wednesday, April 1: 20:15 U.S. ADP National Employment Report for March 20:30 U.S. Retail Sales Month-over-Month for February 21:05 Speech by Fed official on monetary policy 21:10 Speech by a Federal Reserve Governor on AI 21:45 U.S. S&P Global Manufacturing PMI Final for March 22:00 U.S. ISM Manufacturing PMI for March 22:00 U.S. Business Inventories Month-over-Month for January
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