On May 18th, gold prices experienced a "Black Friday" last week, with COMEX gold futures plunging 3.02% to close at $4,543.60, hitting an intraday low of $4,511, marking a nearly two-week trough. The weekly decline reached 3.96%. This week, attention remains on U.S.-Iran tensions, which have not eased but instead intensified over the past weekend. Other factors to watch include routine economic data.
Spot gold continued its weak consolidation on Monday, May 18th, following last week's sharp decline, dipping to around $4,483 in early trading before a slight rebound. Short-term bearish momentum remains strong, with prices generally in a bottom-seeking phase after a breakdown. Currently, the U.S. has outlined five key conditions in response to Iran's proposals, including Iran transferring 400 kilograms of enriched uranium to the U.S. and retaining only one nuclear facility. Reports emphasize that even if these conditions are met, threats of attack from the U.S. and Israel are likely to persist. With the negotiation foundation damaged, an agreement is unlikely in the short term.
The situation continues to escalate with attacks on a UAE nuclear power plant, Saudi Arabia intercepting drones, the U.S. issuing an ultimatum, and Iran's firm response. However, the primary driver of the market sell-off is the strength of the U.S. dollar and rising yields, not a reduction in geopolitical risks. Safe-haven capital is flowing from gold into the U.S. dollar and Treasury bonds. Therefore, the short-term outlook remains bearish, with a strategy favoring selling on rallies.
From a technical perspective, gold experienced a rapid decline after opening today, rebounding after reaching the $4,480 level. Technically, this rebound is merely a technical correction following oversold conditions. There may be further rebound continuation during the day, but the upside potential is limited. Key resistance to watch is the dense high area around $4,560-70 from Friday evening's trading. A break above this level would shift focus to the $4,600-10 zone. Downside extension may be limited for the day, with initial support around $4,500. If prices consolidate and then choose to decline again, a break below $4,500 could lead to a test of the $4,420-4,400 area.
In summary, risk management is more critical than profit-seeking in the current phase. The recommended trading logic is to sell on rallies encountering resistance, aligning with the current daily chart breakdown trend. Patiently wait for prices to rebound to the resistance area near $4,550 and show signs of weakness before entering short positions. Alternatively, wait for a clear reversal pattern to form around the key $4,460-70 resistance zone before considering short-term long positions. Avoid attempting to predict the bottom at this stage.
Therefore, the intraday trading suggestions are: Gold: Sell between $4,540-4,545, with a stop-loss at $4,550, targeting $4,500-4,480. Hold if the support level breaks.
Key financial data and events to monitor today, Monday, May 18th, 2026: - G7 Finance Ministers and Central Bank Governors Meeting (Time TBD) - 22:00 U.S. NAHB Housing Market Index for May
Comments