In Monday's Asian trading session, the international gold market showed divergent movements. Despite escalating geopolitical risks, gold prices failed to sustain their safe-haven rally, instead opening with a gap-down decline. This indicates that the market's primary driver has shifted from purely risk-off sentiment to a repricing of inflation and interest rate expectations.
The Middle East situation has again become a focal point for markets. Over the weekend, ongoing negotiations failed to make progress, significantly escalating tensions between the U.S. and Iran. The U.S. announced plans to impose blockades on key shipping lanes, raising concerns about potential energy supply disruptions. Against this backdrop, crude oil prices surged sharply, with WTI crude gapping up approximately 8.5% at the start of the week and currently trading near $105 per barrel. The rapid rise in energy prices has directly reinforced market expectations for higher future inflation.
Simultaneously, U.S. macroeconomic data has intensified the market's reassessment of interest rate policy. Data showed that the U.S. Consumer Price Index (CPI) for March rose to 3.3% year-on-year, up from the previous 2.4%, with a month-on-month increase of 0.9%, significantly higher than earlier levels. Core CPI stood at 2.6% year-on-year, with a 0.2% monthly increase. These figures indicate persistent inflationary pressures and have notably cooled market expectations for near-term Federal Reserve rate cuts.
In this context, the appeal of gold as a non-yielding asset is being dampened. Sustained high interest rates increase the opportunity cost of holding gold, thereby weakening its allocation value. Although geopolitical risks typically favor gold, the current market is more focused on the impact of rising inflation on monetary policy, placing short-term pressure on gold's performance.
From a market performance perspective, gold rebounded after its gap-down opening, trading around $4,710. In contrast, the U.S. dollar index remained firm, supported by interest rate expectations, further limiting gold's upside potential. Additionally, rising oil prices contribute to imported inflation pressures, potentially prolonging the tightening cycles of major global central banks and continuing to suppress precious metal performance.
Globally, markets are exhibiting a typical "energy-driven inflation" structure. Higher oil prices not only affect energy costs but also transmit through transportation and production chains to a broader range of commodity prices. In this structural inflationary environment, markets are increasingly inclined to allocate to yield-bearing assets rather than non-yielding safe havens.
Regarding market sentiment, investors are rebalancing risk and return. The previous unilateral bet on geopolitical risk is gradually shifting toward a comprehensive judgment of macroeconomic policy paths, temporarily weakening gold's safe-haven attributes. Investors are currently focused on subsequent oil price trends, U.S. policy signals, and whether the Middle East situation will escalate further.
Technically, the daily chart structure shows gold prices entering a corrective phase after recent highs, currently exhibiting a weak, high-level consolidation pattern. Key resistance levels above are located near $4,750 and $4,800, while support below is concentrated around $4,600 and $4,520. Momentum indicators show MACD forming a potential death cross at high levels, and the RSI retreating from overbought territory, indicating weakening bullish momentum. On the 4-hour chart, gold's short-term trend shows a consolidating downward structure. The failure to quickly fill the gap after its formation suggests persistent selling pressure above. A break below the $4,600 support could lead to a further test of the $4,500 area. Conversely, a firm hold above $4,750 could allow for a recovery of recent losses and an attempt to close the gap. Overall, short-term movements will likely continue to be influenced by the interplay between interest rate expectations and geopolitical risks.
In summary, the gold market is currently at a critical juncture influenced by multiple intertwined factors. While geopolitical risks provide some support, inflationary pressures from rising oil prices and stronger U.S. inflation data have significantly bolstered expectations that the Fed will maintain high interest rates, thereby weighing on gold. The future trajectory depends on two core variables: first, whether the Middle East situation escalates further, causing actual supply disruptions, and second, whether U.S. inflation remains persistently high, delaying the rate-cutting process. If inflation continues to rise, gold may face further pressure; however, a worsening of risk events could still trigger a safe-haven driven rebound. Overall, gold is likely to maintain a high-level consolidation pattern in the short term, seeking a new direction between macroeconomic policy and geopolitical risks.
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