On April 13th, negotiations between US and Iranian delegations held in Islamabad, Pakistan, concluded on the morning of the 12th without any agreement being reached. The talks ended unsuccessfully due to significant differences in demands from both sides. The failure of the negotiations means the previous "détente trade" has completely faded, leading to a rapid deterioration in market sentiment. This week features few major events; aside from regular scheduled items, continued attention on Middle Eastern issues is warranted.
On Monday, April 13th, the weekend's marathon talks in Islamabad ended in failure, prompting the US to immediately order a naval blockade of the Strait of Hormuz. Gold opened sharply lower, dropping over $100 to a low of $4,643. However, it has since recovered a significant portion of those losses, climbing back above $4,700.
The market is currently under dual pressure from "failed negotiations and rising inflation" – the US-Iran talks yielded no agreement, pushing oil prices higher, while the stronger-than-expected US March CPI reading has further dampened expectations for interest rate cuts. In the short term, a weak and oscillating trend is expected, but chasing the decline is not advisable. If the blockade persists or negotiations remain broken, the decline could potentially widen further. Conversely, an escalation in conflict would support higher gold prices.
From a technical perspective, early in the week, focus is on the resistance zone formed by the hourly moving average band and the trendline around $4,730-40, with the 5-day moving average also near $4,730. As long as the price remains below the gap resistance above $4,740, the technical bias will remain relatively weak. However, any subsequent corrective decline would still require fundamental catalysts. Support is initially seen around the 20-day moving average at $4,660. A break below this level would signal a more pronounced technical downtrend, potentially opening the path towards $4,600, $4,500, or even $4,300.
In summary, current market volatility is extremely high, and traders should avoid holding losing positions hoping for a reversal. Whether long or short, strict stop-losses are essential. The consolidation phase following such sharp moves can often be erratic; position sizes should be controlled, ideally reduced to one-third of normal levels or even lower, to best protect capital.
Therefore, the intraday trading recommendation is: Gold: Consider short positions around $4,725-30, with a stop-loss above $4,740, targeting $4,660-$4,600. A break below this target zone could allow for holding the position. If the price stabilizes above $4,740, exit shorts and consider long positions, targeting higher levels accordingly.
Key financial data and events to watch today, Monday, April 13th: TBD OPEC Monthly Oil Market Report TBD IMF and World Bank Spring Meetings 22:00 US Existing Home Sales (Annualized) for March