On Tuesday, March 18th, it was noted that concerns over crude oil prices had eased, leading to a pullback in oil prices on Monday. This development dragged down the U.S. dollar and Treasury yields, which helped contain gold's short-term downward momentum. Consequently, the price of gold stabilized, fluctuating around the key $5,000 level. For trading strategies, support was identified at $4,970, followed by $4,930, while resistance was seen at $5,040, and then at $5,100.
Looking at the subsequent price action, gold opened during the Asian session on Tuesday and rebounded to $5,044 before encountering resistance. As the European session began, gold fluctuated lower, finding support at $5,092. After the U.S. market opened, the price rose again to $5,031, met resistance, then fell back to find support at $4,973, ultimately closing at $5,005, unchanged from Monday's close. Overall, gold traded primarily within the anticipated range of $4,970 to $5,040 on Tuesday, continuing its consolidation pattern around the $5,000 mark.
Market analysis suggests that comments last week from former President Trump, indicating the war could end soon, initially triggered a sharp sell-off in oil, with prices falling over $40 from their highs. This alleviated inflation concerns and supported a stabilization and rebound in gold. However, as conflict between the U.S. and Iran showed signs of expanding, renewed worries about oil supply pushed crude prices higher again. Gold subsequently faced selling pressure from its two-week high, dropping to a fresh one-month low. The reason is that elevated oil prices stoke inflation fears, potentially forcing the Federal Reserve to maintain higher interest rates for longer. This supports the U.S. dollar and Treasury yields, which directly pressures gold prices. This week, gold's short-term decline has been contained, and it is now consolidating near one-month lows. This is due to some easing of oil price concerns, with crude falling back below $100 per barrel, which has led to a two-day pullback in the dollar and Treasury yields, providing short-term support for gold. Nevertheless, oil prices remain significantly higher than pre-conflict levels, which continues to limit the upside for gold.
On the daily chart, after facing resistance and declining last week, gold found a footing after hitting a one-month low this week and is now consolidating in a narrow range near $5,000. Key support levels to watch are around $4,970, where the price found support after multiple declines on Monday and Tuesday, followed by the lower Bollinger Band around $4,940. Immediate resistance is seen near $5,040, a level where gold faced selling pressure during Monday's fluctuations and again during Tuesday's rebound, with further resistance at the $5,100 level. Technically, the death cross pattern in the 5-day moving average and the MACD indicator persists, suggesting a downward trend. However, the death crosses in the KDJ and RSI indicators have noticeably slowed, indicating that short-term downward pressure may be weakening and pointing to a potential need for further consolidation.
Intraday outlook for gold: Although the pullback in oil prices has weighed on the dollar and Treasury yields, providing short-term support for gold, prices remain substantially higher than before the conflict, which continues to cap any significant rebound. For now, gold is expected to continue fluctuating around the $5,000 level. A range-trading strategy is advised, with support monitored at $4,970, followed by $4,940, and resistance watched at $5,040, and then at $5,100.