On Friday, April 26, the US dollar index retreated while gold prices rebounded. This movement was influenced by the Department of Justice's decision to close its investigation into Federal Reserve Chair Powell and growing market optimism about potential negotiations to end the conflict involving the US, Israel, and Iran. This week brings several significant events. Beyond continued focus on the Middle East, the Federal Reserve meeting and subsequent remarks from Chair Powell on Thursday are key highlights, as they will directly impact the future direction of gold prices.
As of Monday, April 27, Iran has rejected a second round of negotiations. Although former President Trump extended a ceasefire agreement, US naval forces continue their blockade against Iran. The window for talks between the US and Iran remains open but progress is slow. The ongoing stalemate suggests geopolitical risks will not dissipate quickly, though the market's reaction has noticeably muted.
A sudden security incident at the White House over the weekend, coupled with domestic political disturbances in the US, has raised concerns among institutional investors. When faced with such "unknown risks," large capital often adopts a "cash is king" approach, hoarding US dollars. This further drains liquidity from the gold market, leading to a price drop at the Asian market open instead of a rise. Gold is currently caught between "geopolitical safe-haven demand" and "macroeconomic tightening pressures." In the short term, inflation expectations driven by oil prices and the Federal Reserve's policy direction are the primary bearish forces, while the Middle East deadlock and bargain-hunting by certain central banks provide underlying support. Consequently, gold prices remain caught in a tug-of-war between bullish and bearish factors.
From a technical perspective, on both daily and 4-hour charts, gold is currently trading within a descending channel. The 4740-4750 area serves as a near-term pivotal resistance zone, while the 4650-4660 region is a key support level. Until this range is broken, the market is expected to continue wide, consolidative fluctuations.
In summary, spot gold is currently trading within a broad 4650-4770 range. With major risk events like the Fed's interest rate decision scheduled for this week, markets often experience wide swings to absorb momentum before making a significant directional move. The core strategy for today is to avoid predicting a direction until the range is broken. It is crucial to use strict stop-losses, manage position sizes carefully, and follow the prevailing trend to seek steady gains.
Today's key financial data and events to watch for Monday, April 27, are: 18:00 UK CBI Distributive Trades Survey for April 22:30 US Dallas Fed Manufacturing Index for April
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