On Friday, April 24, during the early Asian trading session, spot gold experienced slight declines amid volatile trading, currently hovering around $4,670. Thursday's session was marked by significant fluctuations: prices initially dropped sharply to around $4,694 during the day, then rebounded to $4,753, followed by a decline during European hours. In the evening, prices climbed again to $4,743, only to plummet late at night to $4,664. Gold ultimately closed lower for the day, down approximately 1% at $4,692.
On the fundamental side, the U.S. dollar index strengthened to a seven-day high, while the yield on the 10-year U.S. Treasury note remained elevated, significantly increasing the opportunity cost of holding non-yielding assets like gold. Additionally, market expectations for Federal Reserve interest rate cuts have been pushed further out, with only one potential cut anticipated this year, suggesting a prolonged high-interest-rate environment. Data released on Thursday evening showed U.S. initial jobless claims slightly above expectations (actual 214,000 vs. expected 210,000), which is typically supportive for gold, but the market reaction was muted, providing little sustained support.
Geopolitical developments remain fluid. Former President Trump stated that military options against Iran remain on the table, while Israeli media reported the resignation of an Iranian negotiation representative. Brent crude oil prices climbed back above $100 per barrel. The CME Group lowered margin requirements for gold and silver futures contracts. Trump also clarified that while military options are retained, nuclear weapons would not be used against Iran. A ceasefire between Israel and Lebanon has been extended by three weeks. Reports emerged of explosions heard over Tehran, Iran's capital, attributed to drone detection, prompting Iran to activate its air defense systems. Israeli sources indicated that Iran's chief negotiator, Kalibaf, has resigned from the negotiation team. Iranian leadership collectively denied internal divisions, with the Foreign Ministry emphasizing that recent negotiations have fundamentally shifted focus away from nuclear issues toward ending the conflict entirely.
From a technical perspective, the daily chart for gold shows yesterday's price action aligned with expectations of pressured consolidation. While the trading range remained constrained, prices briefly pierced below the 20-day moving average and are now trading below the daily moving average band, indicating a generally weak underlying trend. Unless U.S.-Iran negotiations show significant improvement, prices may continue a gradual downtrend, with potential tests of support near $4,650-$4,640, $4,610-$4,600, and possibly the lower boundary of the daily chart's trading range near $4,550. Conversely, substantial progress in negotiations could allow gold to reclaim levels above the $4,720-$4,760 moving average band, potentially halting the corrective trend. However, given the current state of U.S.-Iran relations, a near-term agreement appears unlikely.
Examining the hourly chart, gold traded consistently below the hourly moving average band yesterday, with the structural center of gravity gradually declining alongside the moving averages. The brief breach of a previous low suggests the formation of a descending triangle pattern on the hourly chart, increasing the risk of a further near-term decline. The intraday outlook maintains an expectation for continued adjustment, though downside moves may be limited by news-driven factors. Key support to watch is the $4,660-$4,650 zone; a breakdown below this area could open the path for a decline toward $4,600 or even $4,550. If prices hold above $4,660-$4,650, a continuation of the triangular consolidation pattern is likely, albeit within a narrower range, with resistance expected near $4,710-$4,730.
Trading recommendation for today: Consider initiating a light short position on a rebound to the $4,700-$4,710 area, adding lightly near $4,720-$4,730. Set a manual stop-loss if prices stabilize above $4,730. Initial profit targets are in the $4,680-$4,660 zone for partial position closing and adjusting stop-loss to breakeven. Remaining positions can target further pullbacks toward $4,610-$4,600 and $4,550.
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