JackBlackwell Updated   
OANDA:XAUUSD   Gold Spot / U.S. Dollar
Yesterday, the gold market saw a strong rise under the influence of the geopolitical situation in the Middle East, reaching a maximum of $2,417 in the morning, but then the price retreated and the gains were completely digested. It rebounded again to $2,401 in the evening and finally closed at $2,390, exactly in line with our expectations. The daily chart shows a long upper shadow Yang line, and the short-term indicators continue to decline, forming a deviation from the K-line development. Technically, further rise is not optimistic for the time being.

At present, the geopolitical situation in the Middle East remains a key factor in the market. However, judging from the current situation, it is unlikely that another escalation or even a large-scale war will break out (because Iran does not want the situation to escalate). If the war situation is downgraded, the buying power of gold may weaken, and the market may fall into shock or start to retreat. Judging from the weekly chart, bulls are still in a strong state, but it should be noted that the bottom may be reached in the form of a pullback next week, and one should not blindly chase higher. Technically, the 4-hour chart of gold shows a double top pattern. If risk aversion appears next week and pushes prices up again, but fails to break through new highs, it may continue to fall, which will further confirm the top pattern. The daily closing line of gold has not stabilized above 2400, indicating that 2400 is still a solid resistance level.

Market sentiment is likely to remain cautious, with investors closely monitoring geopolitical developments and economic data releases for cues on future gold price movements.
If geopolitical tensions escalate or economic uncertainty increases, gold could see renewed buying interest. A break above 2400 could lead to further upside momentum, with potential targets around 2420 and 2450.
Failure to hold above 2400 could trigger profit-taking and a pullback in gold prices. In this scenario, key support levels to watch include 2375 and 2350. A break below these levels could pave the way for a deeper correction towards 2320 and 2300.
Traders should closely monitor key levels and geopolitical developments to assess the direction of gold prices next week. Additionally, maintaining a prudent risk management strategy is essential to navigate potential volatility in the market.
On Friday (April 19), Iranian media seemed to downplay the impact of the Israeli attack, indicating that geopolitical risks were reduced, leading to a slowdown in demand for safe-haven assets and gold prices giving up gains. Spot gold rose 0.55% to $2,391.77 an ounce, after rising to a high of $2,417.92 earlier in the session. Prices rose more than 2% this week. U.S. gold futures closed 0.7% higher at $2,413.8.

Gold prices rose for a fifth consecutive week, the longest consecutive upward trend since January 2023. Despite strong gains in the dollar and bond yields, expectations for a rate cut in 2024 have fallen sharply. The factors currently driving gold prices up 16% this year are a combination of geopolitical risks related to the Russia-Ukraine war and the Middle East; strong retail demand in China; central bank demand; rising debt-to-GDP ratios in major economies; and The outlook for inflation is likely to reaccelerate. Fed officials agree that a rate cut is not urgent. The market currently predicts that the probability of a rate cut in September is about 67%. Rising interest rates reduce the attractiveness of holding non-yielding gold.
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Next week is a week with relatively little economic data. We will focus on March new home sales released in the United States on Tuesday and March durable goods data on Wednesday. On Thursday, the market will usher in the U.S. first-quarter GDP report, quarterly PCE data, weekly initial jobless claims and pending home sales data. At present, macro risks remain high and many political situations are unstable. As we saw overnight, I don't need much to trigger a rebound in gold prices. But the trend is still rising, and with geopolitical tensions expected to continue to intensify between now and the U.S. presidential election in November this year, gold may continue to find investment safe-haven bids. Whenever gold and the U.S. dollar rise at the same time, it's usually a very strong sign that the market is primarily driven by safe haven or quality assets, and I don't see any other strong reason for them to do so other than fear A larger conflict occurs, or even just an escalation between Iran and Israel.
Market news over the weekend was relatively dull, and gold is expected to open normally on Monday. Gold's performance at the end of last week was complex and fluctuated greatly, with a maximum of 2417 and a minimum of 2372, with room for rise and fall of up to 45 US dollars. Although an attempt to reach 2,400 failed at midnight on Friday, the closing price was 2,387. Considering that gold fell by US$100 last week, the increase this week is not obvious, and the market may plummet at any time. The market is currently focusing on expectations of a rate cut by the Federal Reserve and the geopolitical situation. However, the inflation problem in the United States remains serious, and interest rate cut expectations may be limited. Therefore, for the long and short trend of gold, attention should be paid to geopolitical risks and main buying support. Although there is currently a bullish trend, it is not advisable to blindly chase the bullish trend. Technical analysis shows that gold’s previous high was 2431 and its second high was 2417. Every rise is accompanied by a large fall, which may form a secondary top. If it doesn't rise again, gold may face a big drop next week. To maintain the bullish trend, the daily unilateral moving average support point is at 2362. Falling below this point may mean the end of the bullish trend, and then shorting will follow the trend. The lower support will focus on 2320, 2300, 2255 or even 2150. Be wary of continuous sharp declines.

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