Zhang Yaoxi: The US-Iran agreement is approaching the final ultimatum, and gold prices are temporarily consolidating sideways in the short term

Zhang Yaoxi: The U.S.-Iran agreement is nearing its final ultimatum, and gold prices are consolidating sideways in the short term
In the previous trading day Monday (April 6): International gold traded in a choppy range and closed down with a doji cross, with a dull trend. On one hand, it was pressured by the strong improvement in the Non-Farm Payrolls on Friday last week, which was a bearish factor, and by the escalation of geopolitical developments driving oil prices higher, which also weighed on gold. On the other hand, the number of vessels transiting the Strait of Hormuz rose to the highest level since early March, weakening the momentum for oil prices to rise, so gold prices are still running above the 10-day moving average. In addition, the Bollinger Bands are narrowing, and the market is not reacting much to both the intensification and easing of geopolitical factors, suggesting that in the short term the trend is mainly expected to be range-bound and sideways consolidation. However, on the other hand, I still favor an upside move.
In terms of the specific trend, gold prices opened in the Asian session at $4,667.68 per troy ounce. They moved lower first and recorded an intraday low of $4,600.66. After that, they stopped falling and rebounded, continuing through the European session to record an intraday high of $4,706.21 at around 5:30 p.m. This met resistance and pulled back, then continued to oscillate and weaken, and into the latter half of the U.S. session it fell into a narrow range of consolidation above $4,646. It ultimately closed at $4,650.19, with a daily range of $105.55 and a decline of $17.49, down 0.37%.

Outlook for today Tuesday (April 7): International gold opened and initially stabilized against further losses, trading slightly stronger. The number of vessels transiting the Strait of Hormuz increased, weakening the outlook for oil prices rising and inflation expectations. In addition, the U.S. Dollar Index fell yesterday; technically, there was a divergence from expectations, implying that the market faces a risk of pullback and decline going forward, which would support gold prices. Therefore, in the short term, gold prices are expected to remain biased toward consolidation before moving stronger.
For today, attention can be given to the U.S. February orders for durable goods month-over-month and the U.S. March New York Fed 1-year inflation expectations. Market expectations are tilted toward being positive for gold; regardless, better than expectations or the prior value, it is also expected that trading will mainly be oscillation with a drift.

In addition, the key focus this week will be the Federal Reserve meeting minutes at 02:00 a.m. on Thursday. At that time, they may reveal officials’ concerns about inflation, as well as the economic impact that the Iranian conflict and potential disruptions in related energy and other commodity flows could bring. Friday at 20:30, U.S. March CPI. The market expects that, boosted by Iran-war-driven higher gasoline prices, March CPI will rise by about 1%. This would be the largest single-month increase since 2022. Both would weaken the outlook for the Fed to cut rates and be bearish for gold. If geopolitical conditions continue to persist this week and the data also matches expectations, but gold fails to recapture last week’s rise and breaks below the 30-day moving average support, then bullish buy pressure for gold would be strong and bearish expectations would weaken. Going forward, gold would still have a tendency toward an upside climb.

On the fundamentals, the market is currently waiting for the arrival of Trump’s “final deadline.” The final deadline for reaching an agreement is Wednesday morning at 8:00 Beijing time. Iran has said it refuses a temporary ceasefire and emphasized a permanent end to the war. Based on this, along with Iran’s included ten demands, it is expected that an agreement will be difficult to reach and the situation may escalate again, which would weigh on gold by pushing it lower. But if the deadline arrives and no large-scale airstrikes occur—even if no agreement is reached—markets will still regard it as good news, and gold would also rebound. The key is to watch the actual performance after the deadline arrives.
Also, the U.S. March services producer price index surged to a new high since October 2022. Two Fed officials warned that the inflation situation is severe, implying they will tighten rather than ease monetary policy. Wells Fargo and Citigroup pushed back their expectations for a Fed rate cut. The outlook for gold rising is weakened. In the short term, it may face sideways-to-rangebound consolidation and adjustment.
But in the longer term, the leading factor and key variable still remain oil prices. The longer the conflict lasts, the more likely energy prices will stay elevated, further pushing up the inflation level, forcing the Fed to maintain the current interest rate level and making it difficult to initiate a rate-cut cycle. This limits gold bulls; however, if the oil price outlook weakens, it will drive gold to strengthen.

So, looking ahead, if the strait situation is resolved, gold will return again to the safe-haven and rate-cut outlook, and rise and climb once more. Conversely, it will continue to consolidate and adjust due to worries about inflation and a weakened rate-cut outlook. However, the longer-term outlook is still upward, because rising inflation will also increase gold’s commodity attributes, and it still faces the risk of stagflation, which would reduce inflation. Therefore, no matter what the outcome is for the current situation, this round of gold’s decline and pressure will still be only an intermediate correction within a larger upward cycle. It’s just that the length of time varies. Over the next year, it is still expected to have the potential to climb upward again and refresh highs.
Technically, at the monthly level, gold’s March closing is above the rising trendline, maintaining a bullish market outlook. The current month’s opening also remains above this rising path. As long as gold does not close below this trendline, there will still be expectations for new highs.
At the weekly level, gold last week, as expected, continued the prior week’s bottoming and rebound that stopped falling and turned bullish, along with rebound momentum, and it became stronger further. However, since it did not break through and hold above resistance from the mid-band or the 5–10 week moving average lines, and bullish momentum was unable to further strengthen, it still leaves pressure for a pullback and adjustment.

But there is also support from the 30-week moving average below. For positioning, during the week you can use this support to initially look for a bullish rebound; if the rebound breaks through the 5–10 week moving average resistance, you can also follow the move to turn stronger and look for new highs.
On the daily chart, gold is trading below the mid-band, above the 10-day moving average; the trend is oscillating and direction is unclear. But if it cannot reclaim and hold above the 60-day moving average, then in the future it faces a scenario of rangebound consolidation and falling, with expectations of revisiting support from the 200-day moving average (currently around $4,200).
So, for short-term positioning, on the downside focus on support at the 10-day moving average and the 144-day moving average to choose a bullish entry; on the upside, the mid-band of the Bollinger Bands and the 30-day moving average will turn into resistance where you can consider shorting.

Gold: Focus on support near $4,580 or $4,460 on the downside; focus on resistance near $4,680 or $4,730 on the upside;
Silver: Focus on support near $71.65 or $69.55 on the downside; focus on resistance near $74.60 or $75.70 on the upside;
Note:
Gold TD = (international gold price × exchange rate) / 31.1035
If international gold moves by $1, Gold TD moves by about 0.25 yuan (theoretical).

U.S. gold futures price = London spot price × (1 + gold swap interest rate × futures expiration days / 365)
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Review historical cause and effect, interpret the current environment, and look ahead to future direction. Adhere to the principle of bold predictions and cautious trading.–Zhang Yaoxi
The above viewpoints and analysis only represent the author’s personal thinking, for reference only, and are not a basis for trading. Any actions taken based on this are at your own risk for gains or losses.
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