On May 11th, our view from the previous Friday was that despite the U.S. conducting a targeted strike on Iran on Thursday, the simultaneous statement that this did not signify a resumption of war and that the ceasefire agreement remained valid fostered optimistic market expectations for a de-escalation in the Middle East. Following its Thursday rebound, oil prices faced renewed short-term pressure, providing support for a gold rebound. Consequently, the suggested trading strategy was to watch for support around $4680, followed by $4660, with resistance expected near $4764 and then $4800.
Subsequent price action showed that during the European session last Friday, gold continued to stabilize above $4700, maintaining a sideways consolidation pattern. After the U.S. market opened, the price experienced a brief surge, reaching $4749 before encountering resistance and retreating to test the key $4700 level again, where it found support. At the opening this Monday, gold gapped lower, breaking below the $4700 level to find support at $4648; it is currently trading around $4658. Overall, while gold stabilized and rebounded last Friday, significant overhead resistance was evident, leading to weak, range-bound adjustments in the short term.
Analysis suggests that last week's developments, including the swift suspension of escort operations by former U.S. President Trump, which sparked renewed U.S.-Iran tensions, followed by reports of a potential memorandum of understanding aimed at ending the conflict, led to a sharp short-term decline in oil prices, supporting gold's rebound from a one-month low. However, the U.S. targeted strike on Iran last Thursday, despite assurances it did not restart the war and that the ceasefire held, clearly disrupted gold's upward momentum. Furthermore, the better-than-expected U.S. non-farm payrolls data released last Friday, against a backdrop of high oil prices exacerbating inflationary pressures, further dampened market expectations for a Federal Reserve rate cut within the year. Compounding this pressure, the U.S. and Iran mutually vetoed each other's latest ceasefire proposals over the weekend, pushing oil prices higher on Monday.
On the daily chart, gold's rebound from a one-month low, which reached a two-week high, has paused for adjustment. Key support levels to watch are the intraday low of $4648, coinciding with the lower Bollinger Band on the 4-hour chart, followed by the psychological $4600 level. Immediate resistance is seen at the $4700 level, where gold found repeated support last Friday and faces selling pressure today, also aligning with the middle Bollinger Band on the 4-hour chart. Further resistance lies near last Friday's high of $4750. While the 5-day moving average and the MACD indicator show a bullish crossover, the KDJ and RSI indicators are turning down from bullish formations, indicating a need for short-term consolidation after the rebound encountered resistance.
Intraday Gold Outlook: The mutual veto of ceasefire proposals by the U.S. and Iran, supporting higher oil prices, coupled with stronger-than-expected U.S. non-farm payrolls data reducing expectations for a Fed rate cut this year, are collectively pressuring gold prices. A range-trading approach is suggested, with support monitored at $4648 and $4600, and resistance watched at $4700 and $4750.