Gold prices experienced a significant rebound on Thursday, 5th June. Spot gold surged to an intraday high of $4,515 per ounce before settling at $4,475, representing a gain of nearly 1%. The August US gold futures contract also strengthened, closing up 0.9% at $4,505.
This price movement was driven by dramatic shifts in Middle Eastern geopolitical tensions. Reports of a potential ceasefire agreement between Israel and Lebanon initially sparked market optimism for a broader US-Iran peace deal. This sentiment directly pressured the US dollar and Treasury yields, boosting the appeal of non-yielding gold. However, subsequent reports indicated that the Iran-backed Hezbollah militia rejected Lebanon's latest ceasefire proposal on Thursday, and Israel stated it would not withdraw troops from southern Lebanon. These developments have complicated efforts to end regional conflicts and pursue a peace agreement with Iran, dampening bullish sentiment for gold. Market attention has now shifted to the upcoming release of the US May non-farm payrolls report on Friday, 6th June.
Current Market Technical Analysis
Following a short-term rally and subsequent rejection, the gold price has retreated consecutively, with the overall technical picture shifting to a weak downtrend. The daily chart shows a long upper shadow candlestick, indicating concentrated selling pressure after a failed bullish attempt. The short-term 5-day and 10-day moving averages have turned downward, forming bearish resistance. The price has fallen below the support of these short-term averages, which have now turned into resistance levels, causing price to retreat upon each minor rebound attempt. The Bollinger Bands are opening downwards, with the price trading in the middle-to-lower band range. The middle band serves as a strong mid-to-long-term resistance, making it difficult for any rebound to break through.
Four-Hour Chart Perspective
The four-hour chart shows a stepwise decline, with successive lower highs confirming a complete downward channel. Short-term rebounds are viewed merely as technical corrections. Immediate resistance is concentrated near recent rebound highs, while key support levels below are being tested repeatedly. A break below these supports would open the door for further downside. The short-term outlook remains biased towards a weak, consolidating downtrend, favoring selling on rallies.
Key Support and Resistance Levels
Immediate support is seen around 4440, which is the consolidation zone from the morning session and the current hourly moving average support. A bounce from this level could present a long opportunity. The crucial psychological support is at 4425; a break below this would weaken the short-term bullish structure. The major mid-term support is at the 4400 level, representing a previous phase low. A breach here would open significant downside potential.
On the resistance side, the first short-term hurdle is around 4480, which is the intraday high where selling pressure emerged. The core strong resistance lies in the 4515-4520 zone, combining a previous consolidation platform and daily chart resistance, making a clean breakout challenging for bulls. The ultimate resistance is around the 4550 area; only a sustained move above this level would fully open the path for a significant rebound.
Short-Term Trading Strategy
A short position is suggested near 4470, with a stop-loss above 4490, targeting a move down to 4440-4425, where a counter-trend long trade could be considered.
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