On May 20, international spot gold opened with a narrow range of fluctuations, yet remained under pressure, with its trend still within a downward trajectory. No positive fundamental catalysts have emerged. Crude oil prices are trading above the middle Bollinger Band and short-term moving averages, indicating a relatively strong rebound. The US Dollar Index also maintains expectations for a continued recovery. Overall, these factors collectively exert downward pressure on gold prices. Consequently, for gold, the outlook remains bearish, awaiting a test of the support at the 200-day moving average. However, the strength of any potential rebound is expected to differ from previous instances. Given the current fundamental landscape, which is predominantly bearish—characterized by the US-Iran stalemate, the unresolved Strait situation, and heightened expectations for Federal Reserve rate hikes—a significant shift is difficult to envision. Any rebound is unlikely to break through the resistance level at $4,700.
While global geopolitical uncertainties, continued central bank gold purchases, the trend of de-dollarization, and potential economic slowdown risks provide structural support for gold, and while surging crude oil prices and an eventual energy crisis dragging on economic growth—potentially forcing central banks to pivot back to accommodative policies—could reignite a new bull market for gold, these are longer-term supportive factors. They are unlikely to alleviate short-term pressures and the substantial need for correction. This environment could easily force out holders with higher-cost positions, with a renewed bullish trend likely only after this shakeout is complete. Therefore, the current market is not merely a battle of psychology but also a battleground where retail and speculative players face intense pressure. This gold bull run has demonstrated that even in a bull market—even if the bull market is not over—those taking long positions can still incur losses.
For the next entry point, one should either wait for a dip below the $4,000 mark to capture a lower level or follow the trend upon a return above $4,800. Fundamentally, re-entry could be considered under conditions such as a long-term US-Iran ceasefire, resolution of the Strait issue, or a diminished outlook for interest rate hikes.
Intraday Gold Reference: Trump's indication of a potential renewed strike on Iran, rising oil prices exacerbating inflationary pressures, and the Federal Reserve's expectation to maintain higher interest rates for longer are supporting the US dollar and Treasury yields, directly pressuring gold prices. Operationally, a range-trading approach is suggested. Downside support can be monitored at $4,460, with a break below eyeing $4,400. Upside resistance levels to watch are $4,514 and $4,530, followed by $4,588.
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