A review of market movements reveals a V-shaped rebound following a steep sell-off, indicating a phase of concentrated bearish momentum release. On March 20th, international gold markets experienced extreme volatility, characterized by an initial plunge followed by a sharp recovery. Spot gold, pressured by the Federal Reserve's hawkish policy decision, fell to an intraday low of $4,503, retreating over $500 from recent highs and hitting its lowest level in nearly a month. Subsequently, bullish forces emerged around a key support zone, rapidly driving the price above $4,660 and forming a V-shaped technical rebound. This movement suggests a release of short-term bearish pressure and a phase of market sentiment stabilization. Domestically, Shanghai gold and Gold T+D contracts followed suit, narrowing losses significantly, with initial signs of a halt to the decline appearing in the precious metals market.
However, history repeatedly shows that extreme panic often breeds turning points. Once the market fully absorbs this round of panic selling, and as signals from Federal Reserve policy show subtle shifts—while the long-term trend of central bank gold buying remains intact—gold, currently mired in a "seven-day losing streak," may break free from the constraints of high interest rates and embark on a new wave of strong rebound.
The core logic behind the rebound can be analyzed through several factors. Firstly, a technical recovery from oversold conditions and key support levels triggered bottom-fishing buying. After consecutive declines, the $4,500 area formed a strong technical support level. Combined with short-term indicators entering oversold territory, programmatic bargain hunting and medium-term positioning funds entered the market in concentration, driving a rapid price rebound typical of post-plunge recovery phases.
Secondly, the market has begun to digest the Federal Reserve's hawkish expectations, leading to a marginal easing of sentiment. The March FOMC decision and Chair Powell's comments are now fully priced in, with expectations for rate cuts within the year having been adjusted. The U.S. dollar and Treasury yields, after initially surging, showed signs of pulling back, temporarily reducing their suppressive pressure on gold and providing a favorable macro environment for the rebound.
Thirdly, the fundamental drivers related to geopolitical tensions and central bank purchasing remain intact, providing medium-term underlying support. Ongoing conflicts in the Middle East have not fully subsided, and the long-term trend of global central bank gold accumulation continues unchanged. The core foundations of the gold bull market remain undamaged; this decline is viewed as a deep correction within the medium-term uptrend, and the rebound is supported by solid fundamentals.
Regarding intraday trend judgments and operational strategies, key price levels are identified. Short-term resistance is seen between $4,700 and $4,720, representing the first hurdle for the rebound. Short-term support lies in the $4,630 to $4,650 range, considered a critical line for the rebound's sustainability. The medium-term target is positioned between $4,840 and $4,860, marking a potential recovery objective.
Looking ahead, the short-term outlook suggests gold has entered a period of oscillating recovery. The phase of one-sided sharp declines appears to have paused temporarily, but clear reversal signals are not yet established, warranting a range-trading approach. Key factors to monitor include subsequent U.S. economic data releases, developments in geopolitical situations, and statements from Federal Reserve officials, as these will determine the rebound's strength and sustainability.