Gold rebound faces resistance; in the short term, sentiment still dominates, awaiting recovery.

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Source: Huizhong Finance

On Tuesday during the Asian session, gold prices rose before retreating, coming under pressure again after rebounding from a low the previous trading day, indicating that selling pressure in the market remains evident. Previously, gold prices dipped to around $4100, a level corresponding to key long-term moving average support, making it an important technical watershed for the current market.

From a fundamental perspective, the ongoing conflict in the Middle East continues to be the core variable influencing gold prices. U.S. President Donald Trump previously indicated a potential agreement with Iran, but Iran quickly denied this and emphasized that the conflict would continue until full compensation is obtained. This divergence in statements exacerbates market uncertainty. Additionally, Iran’s energy infrastructure has once again come under attack, combined with the risk of restricted transportation through the Strait of Hormuz, driving up oil prices.

The rise in oil prices directly boosts global inflation expectations, prompting the market to reassess the policy paths of major central banks. Currently, the market has largely ruled out the possibility of the Federal Reserve cutting interest rates within the year and has begun to increase bets on rate hikes. This shift in expectations has led to a continued rise in U.S. Treasury yields, thereby enhancing the attractiveness of the dollar and putting significant pressure on gold. Since gold itself does not generate interest income, its allocation value declines in a high-interest-rate environment, leading funds to gradually flow towards yield-bearing assets.

Despite this, gold has not experienced a significant one-sided decline, as risk aversion continues to provide some support for prices. With the situation in the Middle East being volatile, the market remains concerned about a further escalation of the conflict, which somewhat limits the downside potential for gold. Therefore, the current gold market exhibits a structural characteristic of “rate pressure and risk aversion support coexisting,” resulting in increased price volatility but unclear direction.

The market will next focus on the PMI data performance of major global economies to gauge economic momentum and its impact on inflation and policy paths. Meanwhile, geopolitical situations remain a dominant factor in the short term; should the conflict escalate further, gold may receive support from safe-haven buying; conversely, if the situation eases, interest rate factors will again dominate the market.

From a technical perspective, the daily structure indicates that gold remains in an overall downtrend; the previous breach of the 100-day moving average has become a key signal of weakening, while the 200-day moving average around $4100 constitutes important mid-term support. Current prices are rebounding above this area, but upward momentum is limited. If the subsequent rebound breaks through $4450, it may test the $4500 resistance again; support is focused on $4305, and if it effectively breaks below this, it may further dip to the $4100 area. From an indicator perspective, the MACD is below the zero line and the green bars are expanding, indicating an increase in bearish momentum; the RSI is in the oversold zone around 25, suggesting a technical rebound demand in the short term, but overall remains weak. On the 4-hour level, gold is exhibiting a choppy bearish structure, with the short-term moving average system maintaining a bearish arrangement, and prices repeatedly encountering resistance from moving averages during rebounds. Current resistance is concentrated in the $4450-$4550 range; if it cannot break through, the market will remain weak; support is located at $4300 and $4100, and once broken, it will open up a new round of downside space. The MACD continues to operate in the negative zone, indicating that the short-term bearish trend has not yet ended, but caution is warranted for potential rebounds following oversold conditions.

In summary, from both the daily and 4-hour structures, gold is currently in a phase of “mid-term downtrend + short-term oversold rebound.” The daily trend has not yet reversed, with the key support at $4100 becoming a dividing line between bullish and bearish; the 4-hour level maintains a choppy bearish structure, with limited rebound space. Overall, before breaking the key resistance at $4450, gold is likely to remain in a weak choppy trend, more likely oscillating between oversold recovery and continued bearishness.

Editor’s Summary

The core logic of the current gold market lies in the game between interest rate expectations and geopolitical risks. Rising inflation pushes up interest rate hike expectations, putting pressure on gold, while ongoing geopolitical conflicts provide some support for it. In the short term, interest rate factors dominate, keeping gold in a weak structure; however, in the medium to long term, attention should still be paid to changes in safe-haven demand and central bank gold purchasing behavior. Future trends will depend on the evolution of the Middle East situation and the global inflation path, and investors should closely monitor key technical level breakthroughs and changes in the macro environment.

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Editor: Zhu Henan