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Gold is going through a heated battle between bulls and bears: Is a big rally about to begin, or is it just a rally followed by a pullback?

Gold’s recent price action has been like a silent struggle. The highs are exciting, while the lows surprise investors. Many people firmly believe that “an economic downturn is inevitable”, but eventually find themselves closing their short positions or falling into a vortex of losses; while others impulsively chase peaks, only to find themselves losers in the end. The bitterness and powerlessness of investment cannot be summed up by “bad luck”. Today, many investors openly admit that their accounts are constantly caught in a vortex of volatility, with short positions directly following long positions.

The market is full of opportunities; what is lacking is the ability to understand its rhythms. Since you are still reading this article, it means you still have ambition and hope. I won’t compromise or be superficial – I wish you good luck and profit on the next market move.

Fundamentals: Interest rate pressure persists and market sensitivity to geopolitical safe-haven assets decreases

Although U.S. retail sales data for April released on Saturday showed a slight increase, the increase was mainly driven by inflation pushing up the nominal data. Meanwhile, import prices rose by the most since March 2022, indicating that cost pressures are spreading to the wider economy. Recent statements from Fed officials have generally been neutral or hawkish; Schmid made it clear that “inflation remains the biggest risk,” while Williams said there was “no reason to raise or lower interest rates at this time.” This means that the high interest rate environment may last longer than the market previously expected, and gold will still face real interest rate pressure.

On the geopolitical front, Ukraine has suffered massive air strikes, Israel and Lebanon have resumed negotiations, and Gulf states are discussing a non-aggression pact. While the geopolitical turmoil has not completely subsided, the market’s reaction to safe-haven news has significantly weakened; the same news that might have triggered a strong price increase two months ago is no longer able to drive a sustained recovery in gold prices.

In short: Macroeconomic interest rate expectations remain the main driver of gold prices, while short-term volatility risks in silver have intensified. The market has yet to show obvious signs of stabilization, and gold prices are expected to continue their weak and volatile trend.

Technical analysis: Key support levels are fragile; the strength of the rebound will determine the trend

Gold prices continued to hit new lows on Friday, hitting as low as 4511, just one step away from the psychological mark of 4500. Although there is some buying support in this area in the short term, the overall structure shows that the rebound is limited and the indicators remain weak. After a consolidation period, further declines are likely.

Four-hour chart: The main support level is the 4500-4510 area. A decisive break above this level would open the way for further declines, with the next target being 4450 and, in an extreme case, a test of the 4400 level.

On the upside, short-term support/resistance is at 4600. If the rebound fails to hold this level, the weakness will continue. Additional resistance lies in the 4680-4690 area, which previously served as major support but has now become significant resistance. Only when it stabilizes above 4600 can gold prices get out of the weak area, enter the consolidation stage, and even achieve a short-term rebound.

Hourly chart: The price is currently consolidating at a low level, the rebound lacks continuity, and the indicators are still weak. If the 4500 level is held, gold prices may briefly consolidate around 4560-4580 before determining direction. On the other hand, if it falls below and confirms the 4500 mark, it is expected to fall quickly.

Strategy for next week: Choose buying or selling positions based on key levels to avoid random dip buying or short chasing. The market is currently in a delicate stage of “weak but not broken”. Avoid betting on trends too early. It is recommended to build positions in batches around key support/resistance areas:

Selling strategy: Strong resistance appears in the 4580-4600 area. Consider selling slightly with stop loss above 4630. The initial target is 4520-4500. If it breaks, wait until 4450.

Buying strategy: Unless there is a clear bottom formation signal in the 4500-4510 area (such as a long lower shadow or a small bullish candle on the hourly chart), do not consider a small position speculative rebound. Stop-loss orders should be placed below the 4490 level with target prices between 4560 and 4580. If the price falls below the 4500 level, the position should be closed immediately; do not hold on for too long.

Lighten up your position: If you hold a long position above 4600, pay attention to whether you hold it at 4500. If the price fails to rebound above 4550, consider reducing your position or placing a stop loss order. If you are short at a lower level, you can gradually take profits in the 4580-4600 range. It is not recommended to hold positions on weekends.

At this stage of the market, the question is not who has the best forecasting skills, but who can control their impulses and tolerate uncertainty. See more and act less until the vision becomes clear; if you decide to take action, use a stop loss order – it’s the simplest thing you can do to protect your account.

Tech Tips and Loss Recovery: If you don’t give up, I won’t go easy on you.

Markets are constantly volatile. Staying in a certain position is not terrible, the terrible thing is losing balance and confidence. If you’re worried about your investing or don’t know where the market will go next week, feel free to ask your questions and suggestions about entry and exit points in the comments section. Every in-depth discussion can be the beginning of a new beginning.

On the road of investment, we do not seek one round of gains or losses, but only long-term stability and tranquility. If you find this article useful, please like it and let more friends who are confused know about it. You can also share it with those who need it, and sometimes a simple gesture can help someone avoid a lot of obstacles.

Let’s join hands and participate in next week’s market.

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