On April 13, the international gold market experienced a sharp plunge during early Asian trading, with spot gold prices tumbling to $4,644.39 per ounce, marking a single-day drop of over 2.3%. This erased all gains from the previous week before prices stabilized and rebounded. By 11:30 AM, gold was trading at $4,720.55 per ounce, down 0.61% for the day. This sudden decline disrupted the previous pattern of narrow-range, high-level fluctuations and intensified the battle between bullish and bearish forces.
The trigger for the drop was a dramatic reversal in Middle East geopolitical tensions over the weekend. Earlier, a temporary ceasefire agreement between the U.S. and Iran had fueled optimism about de-escalation, pushing gold up 1.56% to close near $4,749. However, marathon talks in Islamabad, Pakistan ultimately broke down, prompting the U.S. to order a naval blockade of the Strait of Hormuz—an unexpected development that completely shifted market expectations.
Surprisingly, despite rising geopolitical risks, gold—a traditional safe-haven asset—fell instead of rising, pressured by a strengthening U.S. dollar. The dollar index climbed 0.47% to 99.19, recouping losses from the previous five sessions and gaining against all major currencies. As market uncertainty persists, the dollar's liquidity advantage has become more prominent, drawing capital into dollar-denominated assets and weighing on gold.
From a technical perspective, the sharp decline was not accidental but a logical outcome of prior chart patterns. On the daily chart, gold broke below both the 5-day and 10-day moving averages, disrupting the short-term uptrend. The moving averages have turned downward, forming bearish pressure, with the 5-day average near $4,730 now acting as a key resistance level where multiple rebound attempts have stalled. The MACD histogram has rapidly contracted to near zero, while the signal line has formed a bearish crossover above the zero axis, confirming fading bullish momentum and growing bearish control. The KDJ indicator shows a bearish crossover in overbought territory, with the J-line falling below 30 into weak territory. The 6-day RSI has retreated from above 70 to around 46, indicating cooling bullish sentiment with selling pressure not fully exhausted. On the Bollinger Bands, gold has declined from the upper band toward the middle band, with short-term moving averages converging near the midline, suggesting a bearish consolidation phase.
On the 4-hour chart, the Bollinger Bands are narrowing and flattening, with the upper band at $4,820 and the lower band at $4,695. The MA5 has crossed below the MA10 near the middle band, and prices are trading below the midline, indicating weak momentum. However, the early session rebound from the day’s low, accompanied by a long lower shadow, suggests a potential test of resistance near the MA5 at $4,745. While this may lead to sideways movement, the overall trend remains bearish. Key resistance lies between $4,730–$4,745, with support at $4,665–$4,644. Intraday trading strategies should prioritize selling on rallies, with buying on dips as a secondary approach.
For specific operations, consider short positions in the $4,730–$4,740 range, with a stop-loss set above $4,760 and a target between $4,650–$4,630. If gold breaks below the $4,600 support level, follow-up short positions may target $4,550.