Gold’s main trading range: $4400-4600.

Today is Sunday (March 22) and gold is currently trading at around $4,496 per ounce. Global gold prices fell sharply by 10.49% last week, the largest weekly decline since March 1983.

Q: What happened in the gold market this week? Why the drop so much?

Answer: The price of gold fell sharply three times this week, from US$5,023 at the beginning of the week to a low of US$4,478 on Friday, closing lower for eight consecutive trading days.

The main reason can be summarized as follows: the main axis of market trading has completely shifted from “hedging demand for geopolitical reasons” to “the balance between inflation expectations and monetary policy.”

Specifically, there are three main driving factors:

1: The Fed’s hawkish signal exceeded expectations.

2: Inflation data continues to rise.

3: The dollar and U.S. Treasury yields rise.

Q: Is the situation in the Middle East still escalating? Why has gold completely lost its safe-haven appeal?

A: Instead of calming down, the situation in the Middle East continues to escalate.

The United States has developed strategic plans to seize Iran’s nuclear stockpile, while the Iranian military has threatened devastating attacks against American and Israeli officials.

Importantly, geopolitical risks channeled through oil prices have become a factor in the decline in gold prices.

Since the outbreak of the conflict in the Middle East, the logic of financial markets has gradually become clearer:

Safe-haven funds flowed into oil and the U.S. dollar → Inflation risks forced global central banks to end expansionary monetary policies or even raise interest rates → Gold prices came under pressure.

Short-term macroeconomic factors such as “rising global inflation, rising interest rates, and a stronger U.S. dollar” have overshadowed gold’s traditional safe-haven logic.

After the geopolitical conflict breaks out, the price of gold is likely to fall within a month, and the overall trend turns bearish, which is fully in line with the trading rule of “buy on rumors, sell on rumors”.

Q: From a technical analysis perspective, what is the current status of gold?

Answer: The current market situation can be summarized as “short-dominated and has not yet bottomed out.”

Weekly Chart: The week ended with a big positive line, with prices breaking above the 20-week moving average (around $4,500) and encountering weak support. However, if the price does not rebound to around $4,800 next week, further losses are likely.

Daily chart: The moving average is in a record bearish position, MACD continues to expand, and KDJ is in the oversold zone, but the downward momentum has not weakened and there is no sign of bottoming out.

Main price levels:

Support levels: $4450, $4400, $4335-$4350, $4225.

Resistance levels: $4545-4570, $4600-4635, $4660-4735.

Q: What is your specific trading strategy for next Monday (March 23)?

Answer: The market is currently in a consolidation period after market fluctuations, and volatility is still high. The recommended strategy is “sell on highs and wait patiently for the bottom signal to appear.”

Before a clear reversal signal appears, do not buy a large amount of money on dips.

Method 1: Sell when it rises (trend following strategy)

Entry point: focus on the $4545-4570 area. If the price rebounds to the $4600-4635 range, you can add to your position. If the price rebounds to this range and then stabilizes, consider opening a small sell position.

Target price: $4450-4400.

Stop Loss: Set above $4,660.

In the short term, gold prices may continue to be under pressure and may fall further.

Pay attention to the $4400-4600 range.

Continue selling at key strategic highs before the market fully digests the Fed’s hawkish comments.

If the price breaks below $4,400, the potential decline will extend and it may test the $4,335-4,225 range.

Pay close attention to the $4,400-4,600 range next week. The sell-off will remain at key strategic highs until the market fully digests the Fed’s hawkish comments. A decisive move below the $4,400 level would open the way for further downside potential, perhaps towards a test of the $4,335-4,225 area.

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