On March 25th, our analysis for the previous Tuesday indicated that former President Trump's announcement of a delay in strikes on Iranian energy infrastructure had lowered market expectations for an escalation in tensions with Iran. This led to a decline in oil prices from their highs, which subsequently dragged down the US dollar and Treasury yields, thereby supporting a short-term rebound in gold prices. Technical analysis also suggested that after a sustained sharp decline, gold was due for a corrective rebound. Consequently, for trading strategies, we advised watching support levels at $4,350 and $4,300, with resistance expected at $4,450 and $4,500. A further rebound could potentially target $4,600.
Reviewing the subsequent price action, gold opened during the Asian session on Tuesday, found support at $4,361, and then encountered resistance at $4,448. It later fell to find support at $4,306, rebounded to face resistance again at $4,441, and traded around $4,400 until a late-session surge pushed it to $4,484 before meeting resistance. At Wednesday's open, gold continued its upward move, briefly testing resistance near $4,499. Overall, gold traded largely within the anticipated range of $4,300 to $4,500. Following Monday's reversal from its lows, short-term downward pressure on gold has eased, yet the rebound remains subdued.
Wolfinance star analysts believe that while escalating US-Iran conflicts initially pushed oil prices higher on Monday, causing gold to plunge nearly $500, Trump's comments about "productive dialogue" over the past two days and a five-day delay in strikes caused oil prices to plummet. This drop pulled the US dollar and Treasury yields lower, allowing gold to reverse sharply and briefly erase all its losses. However, Iran's subsequent denial of any direct negotiations helped oil prices stabilize and rebound, which in turn supported a rise in the US dollar and Treasury yields on Tuesday, thereby limiting gold's short-term rebound. Looking ahead, high oil prices fuel inflation, potentially dampening expectations for Federal Reserve rate cuts, which weighs on gold. A de-escalation in tensions leading to lower oil prices could support a gold price recovery.
On the daily chart, after Monday's reversal from the lows, gold's further rebound met resistance, suggesting a consolidative and pressured trend. Key support levels to watch are the psychological $4,400 level, followed by $4,350, where prices stabilized after a rebound failed during Tuesday's European session. Immediate resistance is observed around $4,510, coinciding with the 5-day moving average. A break above this level could open the path towards $4,600 and $4,700. The 5-day MA and MACD indicator show a bearish crossover, but the KDJ indicator signals a bullish crossover, and the RSI is turning up from a bearish crossover, indicating that after stabilizing, gold shows signs of a potential technical correction.
Intraday outlook for gold: Following Monday's reversal, Iran's denial of direct US talks has supported an oil price rebound, boosting the US dollar and Treasury yields, thereby constraining gold's upward movement. Trading strategy suggests a range-bound approach, with support monitored at $4,400 and $4,350. Resistance is eyed at $4,510; a break above this level could target $4,600 and $4,700.