Zhang Yaoxi: Middle East Ceasefire Willingness Released, Gold Price Maintains Rebound Expectation Unchanged

Zhang Yaoxun: Middle East ceasefire intentions are being released; expectations for gold prices to hold their rebound remain unchanged
In the previous trading day on Tuesday (March 31): International gold rebounded strongly as scheduled after Iran’s president signaled a ceasefire intention, crude oil fell, and the U.S. dollar index dropped sharply. It closed higher after breaking through the resistance of the 100-day moving average, with stronger momentum for bulls. In the short term, it may further test 4,840 dollars or higher. Downside, attention should be given to the 100-day moving average or the 5-day moving average support for a renewed bullish entry.
In terms of the specific price action: Gold opened in the Asian session at 4,514.15 dollars per ounce, first traded with consolidation and moved lower, recording an intraday low of 4,482.63 dollars. Then it bottomed out and rebounded, followed by a continuous rise that touched around 4,620 dollars. Although it ran into resistance and pulled back afterward, getting trapped in a 4,545–4,575 dollars range for consolidation, after the U.S. session opened, bulls once again gained strength. It rebounded and climbed consecutively, broke above the intraday high, and extended to the end of the session, reaching an intraday high of 4,686.73 dollars. Finally, momentum weakened and it entered narrow-range consolidation, closing at 4,667.04 dollars. The intraday range was 204.1 dollars, it rose by 152.89 dollars, with a gain of 3.39%.

Looking ahead to today, Wednesday (April 1): In the early Asian-session trading, international gold continues to consolidate slightly bullishly above the 100-day moving average. Its U.S. dollar index opened with continued weakness, providing support. In addition, crude oil yesterday formed a top rebound pattern that wrapped a bullish move within a bearish candle (a bearish engulfing with an upside rebound), suggesting that in the short term, price action is likely to be mainly range-bound or inclined to pull back, which will limit the decline in gold prices. Therefore, the bullish rebound outlook toward the end of the week remains unchanged.
During the day, focus will be on U.S. March ADP employment (10,000 persons) and U.S. February retail sales month-over-month rate, among other data. Market expectations are mixed. In addition, initial jobless claims data expected to be favorable on Thursday, and Friday’s Nonfarm Payrolls expectations are better than the previous value, but the expected value is still very low. Moreover, the expected U.S. March average hourly earnings month-over-month rate is lower. Therefore, in terms of the data, the overall impact on gold prices will mainly be choppy volatility, and it still leans toward being favorable for strength. So, for now, for weekly trading, keep the low-buy-and-bullish stance unchanged.
On the fundamentals: Concern about the Middle East situation is easing. Trump again released a ceasefire signal, saying he is willing to end the war even if the Strait of Hormuz remains closed, and that Iran’s war would end within two to three weeks. At the same time, there are signs that Iran’s leadership may be open to talks to end the war. Iran’s president: “If our demands are met, we are willing to end the war.”

So, as the market hopes the Middle East conflict can end quickly, the outlook for crude oil’s strength, and the outlook for rising inflation will weaken. The expectations for the Federal Reserve to raise rates will also weaken. In addition, with this week’s Federal Reserve Chair Powell stating that the Fed will wait and observe the impact of the war on the economy and inflation, it will not consider rate hikes for now. Fed Governor M i l a n also said the Fed can gradually cut rates by one percentage point within a year, etc. The market will again revisit rate-cut expectations. Therefore, I still believe that this leg of gold’s decline is only a mid-cycle correction within a larger uptrend cycle. Over the next year, it is still expected that gold will likely climb higher again and refresh highs.
Technically: On the monthly timeframe level, gold’s March close is above an upward trendline, maintaining a bullish outlook. As long as the price does not close below this support line, the expectation for new highs will still remain.
On the weekly timeframe level, gold this week is expected to continue the prior week’s bottoming-and-rebound, stop-the-falling bullish formation and rebound momentum as scheduled, with further strengthening. It has also initially broken above the resistance of the mid-channel line, and bullish momentum is increasing. If this week’s close is above this level, or if it breaks through the resistance of the 5–10 week moving averages, then the price action is expected to refresh historical highs again.

On the daily chart: Gold has currently broken above the resistance of the 100-day moving average and is trading above it. The bullish outlook is increasing. In the short term, it may continue to strengthen and test the 4,800 level or higher. Downside, the 100-day moving average will turn into support, and the bullish trading bias will remain unchanged.

Gold: Downside support to watch around 4,640 dollars or 4,590 dollars; upside resistance to watch around 4,780 dollars or 4,845 dollars;
Silver: Downside support to watch at 73.30 dollars or 72.50 dollars; upside resistance to watch at 76.90 dollars or 80.00 dollars;
Note:
Gold TD = (international gold price × exchange rate) / 31.1035
A 1-dollar move in international gold corresponds to about a 0.25 yuan move in gold TD (theoretically).
U.S. futures gold price = London spot price × (1 + gold swap interest rate × days to futures expiration / 365)
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Review historical cause and effect, interpret the current environment, and look ahead to future directions. Adhere to bold forecasting with cautious trading principles.–Zhang Yaoxun
The above viewpoints and analysis only represent the author’s personal ideas and are for reference only. They are not trading basis. Trading based on this is your own responsibility for profits and losses.

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