On May 15, gold prices experienced a weak and volatile session. Trading in the Asian session hovered around the $4700 level before a more significant decline occurred during the U.S. session. After breaking below the $4700 mark, the price hit an intraday low of $4643 in the late overnight session, ultimately closing at $4649. This resulted in a third consecutive daily decline.
As of Friday, May 15, the situation between the U.S. and Iran remains in a state of tense, unresolved stalemate. Neither side appears willing to escalate into full conflict, nor can they achieve a substantive resolution to end the confrontation. This ambiguous state makes it difficult for the market to price gold—full war would drive prices higher, while genuine peace would trigger selling. The current intermediate state leaves gold prices susceptible to volatile swings based on news flow.
However, the latest U.S. economic data has delivered a significant shock. The April Producer Price Index (PPI) surged 6.0% year-over-year, while the Consumer Price Index (CPI) rose 3.8% year-over-year, both figures substantially exceeding expectations. This "blowout" data has shattered market expectations for a Federal Reserve rate cut this year. Markets are now even pricing in the possibility of a rate hike by year-end, with probabilities at one point exceeding 30-40%. The sharp rise in real interest rate expectations directly increases the opportunity cost of holding non-yielding assets like gold, applying fundamental downward pressure on its price. Additionally, signals of "progress" in U.S.-Iran negotiations and positive tones from U.S.-China leader talks have improved overall market risk sentiment, weakening traditional safe-haven demand for gold.
From a technical perspective, the overnight decline saw gold break below the 60-hour moving average. The hourly chart now shows moving averages crossing and trending downwards. This has led to continued selling pressure at today's open, with the price breaking below the short-term trendline support at $4625. The next key test is likely around the $4600 level, where a technical oversold bounce may occur. However, as long as the price does not recover above the previous low of $4640-50, the overall structure for gold will remain weak. If, after a brief consolidation, the downward trend resumes, a break below $4600 is highly probable. In such a scenario, further support levels to watch would be $4560/50 and $4520-00.
In summary, in the face of strong macroeconomic headwinds, any price rebound not supported by significant positive news is likely to be viewed as an opportunity to sell into strength. As today marks the weekly close on Friday, traders should be cautious of amplified volatility due to end-of-week position squaring. The short-term outlook is treated as volatile with a bearish bias, with $4600 serving as a critical defensive line. The recommended trading strategy is range-bound with a focus on selling rallies, complemented by buying dips, while employing strict stop-losses and awaiting a clearer directional breakout.
Intraday trading suggestions are as follows: Gold: Consider selling in the $4622-4625 range, with a stop-loss above $4635, targeting $4560-4550. Hold the position if the price breaks below this target.
Key economic data and events to watch for Friday, May 15: - TBD: End of Fed Chair Powell's Term - 20:30: U.S. May New York Fed Manufacturing Index - 21:15: U.S. April Industrial Production MoM