April 6: In the gold market last week, international gold continued its rebound from the previous week's bottom, showing strength. Although it encountered resistance and pulled back, it still closed above the middle Bollinger Band, indicating continued bullish momentum and room for further gains. This week, the focus will be on the resistance posed by the 10-week moving average. A sustained break above this level would suggest potential for new highs; otherwise, the risk of consolidation remains.
In terms of specific price action, gold opened lower at the start of the week at $4,484.99 per ounce, initially declined to touch the weekly low of $4,420, filling the gap, then rebounded consecutively. It reached a weekly high of $4,800.19 on Thursday before encountering resistance, pulling back sharply to around $4,553. However, it eventually stabilized and recovered. With markets closed on Friday for Good Friday, the weekly closing price settled at $4,668.84. The weekly trading range was $380.19. Compared to the previous week's close of $4,505.63, gold gained $163.21, a rise of 3.63%.
Influencing factors: Initially, escalating geopolitical tensions, with Houthi forces joining strikes against Israel, led markets to fully price out any U.S. rate cuts for 2026, pressuring gold lower. However, dip-buying support emerged, and subsequent comments from the Iranian President expressing willingness to cease hostilities, coupled with former President Trump's remarks that the conflict would end soon, fueled a consecutive rebound, pushing gold to the weekly high.
Nevertheless, during early Thursday trading, Trump's national address did not meet expectations for ending the war. Instead, he indicated further significant strikes against Iran over the next two to three weeks, reigniting geopolitical tensions and inflation concerns, which reduced expectations for rate cuts and triggered a sharp sell-off in gold. This resulted in a weekly close that was higher but off the peaks.
Looking ahead to Monday, April 6: International gold opened lower, pressured by better-than-expected unemployment and non-farm payroll data released on Friday, alongside renewed threats from Trump to strike Iranian energy facilities if the Strait of Hormuz does not reopen, which boosted oil prices at the open. This initially weighed on gold.
However, the gold market's reaction to stronger oil prices and potential inflation was muted. Additionally, lower-than-expected annual and monthly readings for Average Hourly Earnings in March limited the extent of the early session decline.
During the day, attention will be on the U.S. March ISM Non-Manufacturing PMI. Market expectations are for a figure that could support gold, potentially limiting further downside pressure. However, trading remains below key resistance, and the overall trend is still relatively weak.
This week's key focus will be on U.S. March CPI data (year-on-year and month-on-month), among other releases. Current market expectations point to a significant rise, which could reinforce prospects of resurgent inflation, significantly reduce the probability of Fed rate cuts within the year, and even spark discussions about potential rate hikes. This scenario could substantially pressure gold lower, towards $4,460 or even $4,300. Conversely, if the data falls short of expectations, it could lead to volatile trading. If figures match or are below previous values, a strong rebound could occur, potentially driving prices towards $4,840 or the $5,000 mark.
Fundamentally, geopolitical conflicts remain unresolved with no effective agreements or ceasefires. If conflicts persist long-term and disruptions in the Strait of Hormuz continue, U.S. crude could maintain levels at $110 or above, while Brent crude could stay elevated in the $130-$150 per barrel range, with geopolitical risk premiums providing core support for oil prices.
High oil prices would transmit through the entire supply chain, pushing up global inflation and ultimately affecting consumer goods markets worldwide. This could lead to a scenario of high inflation coupled with low economic growth, resulting in stagflation.
Alternatively, rising oil prices could pressure the U.S. economy through cost increases. High oil prices might lead consumers to reduce spending, eventually causing prices to reverse. Inflation could also potentially decrease.
Drawing a comparison to the summer of 2008, when international oil prices surged to around $150 per barrel, exacerbating the U.S. economic slowdown, data from the U.S. Bureau of Labor Statistics shows that overall U.S. inflation actually decreased from 7.9% in Q2 to 2.6% in Q3 of that year. Therefore, rising oil prices do not necessarily guarantee higher inflation or diminished rate-cut expectations.
Furthermore, comparing the periods from 2020 to 2022 and July 2007 to August 2008, both of which saw oil prices double, gold subsequently entered bull markets. Thus, the current rise in oil prices may be setting the stage for a bull market in the second half of this year or next year.
Additionally, according to Zhang Yaoxi, the gold market typically trades on expectations. The previous decline, which saw a low near $4,100, likely already priced in the worst-case scenario involving surging oil prices, rising inflation, and subsequent Fed hawkish expectations. Currently, while conflict persists, if Strait transit remains relatively controlled, it suggests manageable future inflation. In this case, persistent geopolitical tensions could shift focus towards gold's safe-haven demand.
Moreover, Fed Chair Powell has indicated a wait-and-see approach regarding the war's impact on the economy and inflation, stating that rate hikes are not currently under consideration. Fed Governor Waller has also suggested the Fed could gradually cut rates by one percentage point over a year. Markets may once again focus on rate cut expectations. Therefore, regardless of the conflict's resolution, markets are likely to return to anticipating the Fed's easing cycle, alongside structural supportive factors like central bank gold buying and de-dollarization. Consequently, the view remains that this recent decline in gold prices is likely a mid-cycle correction within a larger upward trend. Gold is expected to resume its upward trajectory and reach new highs within the next year.
Technically, on the monthly chart, gold closed March above its rising trendline, maintaining its bullish outlook. The April opening remains above this trendline. As long as prices do not close below this trendline, the prospect of new highs remains.
On the weekly chart, gold continued last week's anticipated rebound from the previous week's bottom, showing a stabilization and bullish pattern with further strength. However, failure to break and hold above the middle Bollinger Band or the 5- and 10-week moving average resistance has prevented a strengthening of bullish momentum, leaving room for corrective pressure. Short-term traders might consider taking profits. Strategically, one could either wait for a break above the 5-10 week MA resistance to confirm strength and target new highs, or wait for a pullback towards $4,300, or even the $4,000 level, to establish long positions gradually.
On the daily chart, the rebound failed to overcome the middle Bollinger Band resistance, leading to a pullback. The early session saw prices fall back below the 100-day moving average, giving bears a temporary advantage. Support levels to watch for potential long entries are the 10-day MA and the 144-day MA. The 100-day MA and the middle Bollinger Band now act as resistance.
For specific intraday trading guidance, refer to real-time account information.
Preliminary intraday trading level references (specific entry/exit points subject to real-time account notifications): Gold: Support around $4,540 or $4,445; Resistance around $4,680 or $4,730. Silver: Support around $69.75 or $67.50; Resistance around $73.00 or $75.45.
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