On April 6, the release of the non-farm payrolls report last Friday triggered a dramatic reversal in the gold market. The U.S. economy added 178,000 jobs in March, significantly exceeding market expectations of 65,000. More critically, February's data was revised down from an initial loss of 92,000 jobs to a deeper loss of 133,000 jobs. This shift from "negative growth" to "exceeding expectations" represents a striking contrast. Simultaneously, the unemployment rate fell to 4.3%, lower than the anticipated 4.4%, and wage pressure showed signs of easing. This series of strong data directly extinguished market hopes for Federal Reserve rate cuts in 2026, becoming a core bearish factor pressuring gold prices.
Further stirring market nerves, former President Donald Trump issued a strong statement on social media on Sunday. He directly warned Iran that if it does not quickly open the Strait of Hormuz, he would make Iran "live in hell." He also designated April 7 as "Iran's Power Plant Day and Bridge Day," hinting at potential strikes on Iranian energy facilities and critical infrastructure. Having previously issued multiple ultimatums, with deadlines extended from March 21 to April 6, his latest update to the timeline, while highly dramatic, offers no clear signs of resolution to the energy situation.
Overall, gold's medium-term trajectory remains dominated by three core variables: the duration of Middle East conflicts, the transmission path of oil prices, and the direction of Federal Reserve policy. With the non-farm payrolls data now released, market focus this week will gradually shift to key U.S. economic indicators, including the ISM Services PMI, durable goods orders, FOMC meeting minutes, GDP, core PCE, and CPI data. These figures will reveal the true state of economic growth and inflation, thereby influencing interest rate expectations and the direction of gold prices.
I. Market Tone: Impacted by the dual headwinds of the strong non-farm payrolls report and Trump's remarks, gold opened lower from last week's closing high and probed downwards towards the $4,600 per ounce level. This has essentially established a technically weak tone for the week. In the short term, gold lacks significant upside potential, generally exhibiting a pattern of downward pressure from elevated levels. The specific extent of the pullback will need to be adjusted according to market dynamics.
II. Technical Analysis: Daily Chart: The strong uptrend has ended, with weakness returning. After rebounding from $4,100 to $4,800, gold's consecutive bullish run was interrupted by a large bearish candlestick. The current daily chart shows consecutive bearish candles closing below the Bollinger Band midline, confirming weak characteristics. If this weakness persists, a retest of support at lower levels is highly probable, indicating a temporary exhaustion of medium-term upward momentum.
4-Hour Chart: Range-bound and awaiting a breakout. The 4-hour cycle shows a consolidation pattern, with the Bollinger Bands contracting and moving averages converging, indicating a temporary lack of momentum for a sustained directional move. Strong resistance is formed around $4,800, while key support lies near $4,500. Until this range is broken, gold prices are likely to maintain a sideways consolidation. A decisive break above or below these key levels would require analysis of accompanying news to judge the sustainability of a new trend.
III. Core Strategy: Gold's core trading range for the week is projected between $4,500 and $4,800. As long as this range holds, Wen Chengkai suggests adopting a strategy of selling near resistance and buying near support to capture opportunities within the volatility. A decisive break above $4,800 could target the $5,000 level. Conversely, a break below the $4,500 support could see prices fall towards $4,350. The overall strategy for the week is to treat the market as weak and range-bound, aligning short-term trades with the weak rhythm, prioritizing opportunities within the range, avoiding blind chasing of rallies or panic selling, and considering adding positions only after a clear breakout signal emerges.
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