On Monday, April 20, during the Asian trading session, gold exhibited a V-shaped reversal pattern. The market opened with a gap down, dropping to a low near $4,737 before quickly rebounding to around $4,810, highlighting the intense tug-of-war between bullish and bearish forces in a complex macroeconomic environment. Notably, despite the escalating situation in the Middle East, gold failed to sustain a safe-haven rally and instead experienced a pullback, indicating a substantive shift in the current market driving logic.
Regarding the event backdrop, Iran not only announced the closure of the Strait of Hormuz but also explicitly stated it would "take action against vessels approaching the area before the US lifts its maritime blockade." Concurrently, market surveys indicated Iran denied participating in a new round of negotiations, creating a stark contrast with diplomatic signals from the United States. This series of uncertainties has further heightened market concerns about energy supply disruptions and regional stability.
However, gold has not benefited from this. The core issue lies in changes in macro-financial conditions: due to persistent inflationary pressures and energy price increases driven by geopolitical risks, market expectations for the Federal Reserve's policy path have shifted towards "higher rates for longer." In this context, elevated US real yields significantly increase the opportunity cost of holding gold, a non-yielding asset, directly pressuring its price.
Simultaneously, the relatively firm performance of the US dollar also exerts downward pressure on dollar-denominated gold. In a high-interest-rate environment, capital tends to favor dollar-denominated assets over safe-haven options like gold. This shift in capital flows is a key driver behind the current decline in gold prices.
The current market focus has shifted to the upcoming US retail sales data for March. Market expectations point to a month-on-month increase of 1.3%, higher than the previous reading of 0.6%. Strong data could further reinforce expectations of "economic resilience and sticky inflation," supporting the dollar and weighing on gold. Conversely, weaker-than-expected data might alleviate upward pressure on interest rates, creating room for a gold price rebound.
Overall, gold is caught in a core tug-of-war between its "safe-haven attributes" and its "interest rate sensitivity." Geopolitical risks provide underlying support, but changes in the interest rate environment are dictating short-term price action, leading to a phase of price pressure for gold.
In summary, the core market conflict is the hedging of geopolitical safe-haven demand against the high-interest-rate environment. In the short term, the Fed's relatively hawkish stance remains unchanged, limiting gold's upside potential. Even amid tense situations, it is difficult to form a sustained rally. Future trends will depend on US economic data performance and shifts in interest rate expectations. If easing inflationary pressures lead to a policy pivot, gold still retains the potential to strengthen again. However, vigilance is required against the persistent risk of a strong US dollar applying downward pressure.
Gold Price Analysis: Last week, driven by fluctuations in the geopolitical situation, gold formed a pattern of "falling first, then rising, and oscillating upwards." It opened the week by testing a low near $4,640, then staged a strong rebound to a high near $4,890 by the week's end, closing higher overall. The core logic behind these fluctuations is clear: the US-Iran situation and the on-again, off-again status of the Strait of Hormuz. While it appears news-driven, as previously emphasized, clear technical trading signals can still be identified amidst the geopolitical noise; each wave of movement has a discernible direction.
From a daily chart perspective, gold is showing a corrective pullback from high levels. It failed to decisively break above the key resistance at $4,900, indicating weakened upward momentum. The $4,650 level constitutes important support; a break below this could open the door for further declines. The key to determining a shift in momentum lies in daily closes: consecutive bearish closes would focus attention on the $4,650 support, while consecutive bullish closes would shift focus to a break above $4,900. If the daily candlesticks can hold firmly above the Bollinger Band midline around $4,650, the broader bullish structure remains intact.
From a 4-hour chart perspective, gold has broken below its short-term uptrend line, entering a corrective channel with weakening momentum indicators. If a rebound fails to reclaim the level above $4,850, the short-term bias is likely to remain weak to sideways. However, if price stabilizes within the support zone, another test of previous highs cannot be ruled out. Currently, gold remains in a strong consolidation pattern, largely confined to last week's broad range of $4,650 to $4,900. As long as this range holds, a sustained directional trend this week remains unlikely.
Trading Strategy: Short-term resistance is seen in the $4,850-$4,900 zone, with support located around $4,720-$4,650. The suggested approach is to avoid guessing the direction blindly. As long as the range remains unbroken, consider trading between resistance and support levels. Once a decisive breakout occurs, traders can then follow the new trend direction. In summary, the core strategy for the week is range-trading, selling near resistance and buying near support, avoiding chasing breakouts, and patiently waiting for opportunities near key support and resistance levels.