On April 21, gold continued its sideways movement, with even narrower fluctuations than anticipated. The market saw significant activity only after an initial sharp decline at opening, followed by a rebound. The European session was relatively quiet, while during the US session, a short position was entered after prices rose above $4,820, with a manual exit above $4,790, securing a modest profit of over $20. Gold ultimately closed at $4,819, forming a small bearish candlestick on the daily chart.
This Tuesday, April 21, the market is in a highly sensitive "final countdown phase." The two-week temporary ceasefire agreement between the US and Iran is set to expire on Wednesday, April 22, Beijing time. The US administration has clearly stated that if no deal is reached by then, an extension is "highly unlikely." Concurrently, the Federal Reserve Chair nominee's confirmation hearing takes place tonight, and expectations for interest rate cuts continue to be suppressed. These conflicting factors are driving intense battle around the $4,800 level for gold.
The current stalemate, characterized by one party pushing for negotiations and the other refusing to compromise, keeps Middle East tensions at risk of escalating at any moment. Typically, this would trigger safe-haven buying, yet gold prices have remained relatively restrained. Furthermore, shipping data indicates that traffic through the Strait has nearly halted, with only three vessels passing in 12 hours. Iran briefly lifted its blockade before reinstating it, while the US maintains its blockade on Iranian ports. With a critical global energy artery constrained, a geopolitical risk premium persists.
From a technical perspective, the hourly chart structure and fundamental expectations suggest gold will maintain its consolidation pattern for now. Key resistance remains the gap fill level around $4,830-40 from yesterday. A break above this level would shift focus towards the trendline resistance zone of $4,970-90. On the downside, crucial support lies around the 10-day moving average at $4,785-80. A breach below this level would indicate a stronger likelihood of a technical correction, though this remains contingent on incoming news.
In summary, ahead of the ceasefire outcome and tonight's hearing results, major capital is hesitant to make large moves, resulting in wide, volatile, and choppy price action. In such a news-driven, range-bound market, the core trading strategy can be summarized as: avoid chasing prices and instead sell near highs and buy near lows.
Today's trading recommendations are as follows: Gold: Trade within the small range of $4,780-$4,830, with an 8-point stop-loss and a 30-40 point take-profit. For the larger range of $4,730-$4,880, use a 15-point stop-loss and target profits of 100-120 points.
Key economic data and events to watch today, Tuesday, April 21: 20:30 US March Retail Sales MoM 22:00 US February Business Inventories MoM 22:00 US March Pending Home Sales Index MoM 22:00 Fed Chair Nominee Hearing 02:30 (Next Day) Speech by Fed Governor Waller