Gold prices stabilized at the beginning of the week as the market awaits bank decisions

On Monday (April 27), global gold prices remained basically stable, with investors cautious in view of the faltering negotiations between the United States and Iran. As of press time, spot gold prices edged up 0.1% to $4,714.51 per ounce. Gold prices fell 2.5% last week, ending four consecutive weeks of gains.

Fundamental factors: Interest rate expectations weaken demand for safe havens

Although geopolitical risks have provided support for gold prices, market focus has clearly shifted to how long interest rates will last rather than the geopolitical events themselves. The Fed’s hawkish stance is unlikely to change in the short term, continuing to limit the potential for gold prices to rise. Even if U.S.-Iran tensions ease and the Strait of Hormuz reopens, a rebound in economic activity could keep inflation high and force the Federal Reserve to maintain tight monetary policy.

Rising oil prices and the resulting rise in inflation have raised market expectations for rising interest rates and reduced gold’s appeal as a non-interest-bearing asset. The current market trend is divided, and geopolitical risks and interest rate expectations have caused a long-short dispute, resulting in weak and volatile gold price patterns.

Focus will quickly turn to central bank policymaking this week, with a series of meetings from the Federal Reserve, European Central Bank, Bank of England and Bank of Japan coinciding with the release of first-quarter U.S. GDP and March personal consumption expenditure data. If the Fed sends a hawkish signal, gold prices could see a deeper pullback.

Technical Analysis: Bearish pattern has formed, trading is weak in specific ranges

From the daily chart, gold has formed a short-term bearish pattern. The 24-day and 38-day moving averages formed a sharp crossover, and the price of gold fell below the moving average support level. The fast and slow MACD indicator lines have formed a sharp crossover above the zero line, and the green momentum column continues to expand, clearly indicating a bearish signal. The Bollinger Bands continue to narrow, with prices fluctuating within a narrow range around the middle band. The possibility of a unilateral breakthrough in gold prices has increased this week, and it is expected to fall further.

Judging from the 2-hour chart, $4735-4740 per ounce is still the first major resistance level for gold prices. Short-term rallies should be viewed as pure accumulation and correction until this level is actually breached. On the four-hour chart, gold prices are trading within a narrow range between $4,657 and $4,740 an ounce. The MACD indicator forms a golden cross below the zero line, indicating a possible short-term rebound. On the hourly chart, after early losses, short-term indicators are pointing to oversold conditions, with the moving averages flattening and prices falling into Bollinger Bands, suggesting a possible rebound during the Asian trading session. However, given the strong upward pressure, this rebound may be limited.

In summary, gold prices are expected to continue their downward trend in the near future. The main support level is $4,650 an ounce; a breach of this level could lead to a further drop to $4,550.

Reference trading strategy for the day: Short selling strategy: Sell gold in batches near $4730-4740, stop loss at $4750, target price at $4680-4650, and if the price breaks through this level, the additional target is $4600.

Long-term buying strategy: Buy gold in batches at 4600-4610, stop loss at 4580, and target price between 4650-4680. A breakthrough of this level may lead to 4700.

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