On Monday, April 20th, the international gold market opened with significant volatility. Spot gold opened sharply lower, dropping over $90 to reach a low of $4,737 per ounce, a decline of 1.8%, directly reversing the strong upward trend from the previous Friday. By midday, the price had rebounded slightly to around $4,790 per ounce, showing characteristics of a technical recovery with a "lower open, higher move" pattern aimed at filling the opening gap. Overall, trading was confined within a range of $4,737 to $4,830.
A sudden escalation of tensions in the Middle East over the weekend acted as the catalyst for the sharp decline. The Strait of Hormuz was closed again, U.S. forces seized an Iranian commercial ship in the Gulf of Oman, and Iran explicitly rejected a second round of U.S.-Iran negotiations while vowing retaliation. These events directly heightened global energy risks, pushing WTI crude oil prices up 3.2% at the open to break through the $95 per barrel mark, thereby intensifying market concerns about inflation.
From a market expectations perspective, resurgent inflation is significantly dampening expectations for interest rate cuts by the Federal Reserve. According to the CME FedWatch Tool, market expectations for a rate cut in June have fallen to 0% from 35% a week ago, while the probability of a September cut has retreated to 62% from 78%. The U.S. dollar index, supported by both safe-haven demand and heightened rate expectations, climbed quickly to a one-week high of 100.2, applying direct downward pressure on dollar-denominated gold.
Technically, on the daily chart, after hitting a historical high of $5,597 per ounce in January, the gold price has formed a wide consolidation pattern and is currently trading near the lower boundary of this range. Short-term moving averages are arranged in a bullish sequence, with the price trading above the 5-day moving average. However, the market has repeatedly faced resistance on upward moves, leading to a buildup of K-lines. Coupled with a shortening of the MACD red histogram, this indicates weakening upward momentum and signals a high-level consolidation phase.
On the 4-hour chart, after touching $4,737, the price has formed a potential double-bottom pattern. Concurrently, the MACD indicator shows a bearish divergence signal, and the green histogram is narrowing, suggesting that short-term rebound momentum is building. The current price is constrained by resistance near the 20-period moving average at $4,810. A decisive break and sustained hold above the $4,810 level could pave the way for a further move to fill the gap in the $4,830 to $4,850 range.
On the 1-hour chart, the price is oscillating narrowly within a $4,750 to $4,815 range. The Bollinger Bands are contracting and moving sideways, indicating that the market is awaiting a new catalyst. Immediate resistance is at $4,833, with support at $4,737. A breakout from this range will clarify the short-term direction: a decisive break above the $4,850 resistance could open the path towards the $5,000 psychological level, while a break below the $4,700 support could lead to a further decline towards $4,500.
Trading Strategy: For short-term trades, consider buying near support and selling near resistance within the $4,730 to $4,830 range, with a stop-loss set $20 outside the range. If the price establishes a firm foothold above $4,830, consider entering a long position targeting $4,855 to $4,900, with a stop-loss at $4,800. If the price breaks below $4,730, consider entering a short position targeting $4,650, with a stop-loss at $4,760. For medium-term positioning, if the price fails to break above $4,855, consider initiating short positions again; a break above this level would shift focus to the structural resistance zone between $4,900 and $4,950.