Gold Weekly Review: Key support level becomes the focus of long and short positions
Market performance review
This week, gold prices were under significant pressure, with a single-day drop of more than 2% on Friday and a cumulative drop of nearly 4% for the whole week, the worst single-week performance since November last year. The main drag factors include:
Trade tensions eased: The two major economies suspended the trade war for 90 days and planned to advance detailed negotiations, market risk appetite rebounded, and funds shifted from safe-haven assets to risky assets such as stocks.
Technical selling pressure: Futures traders took profits at high gold prices, triggering a chain of position adjustments.
Analysis of core influencing factors
Inflation data slowed down
The US CPI rose 2.3% year-on-year in April (previous value 2.4%), and core inflation was mild, indicating that price pressure was controllable.
Weak inflation data strengthened the market's expectations for the Fed to cut interest rates this year, but the rate cut is expected to be reduced from 100 basis points in April to 56 basis points, and the first rate cut may be postponed to September.
Fed policy trends
The Fed chairman's recent statement suggests that the monetary policy framework may be adjusted to cope with potential future supply shocks (such as tariffs pushing up inflation).
The current unemployment rate of 4.2% is close to full employment, and the decline in inflation has not significantly damaged the economy, providing room for policy adjustments.
Trade and geopolitics
Although the trade war has been suspended, the effective tariff rate of the United States is still at a historical high (13.1%), and the long-term drag on economic growth may limit the downward space of gold prices.
The situation in the Middle East and Russia and Ukraine has eased, further weakening the demand for safe-haven, but potential variables remain.
Technical analysis: Key support levels have become the focus of long and short competition
Short-term trend:
Gold prices fluctuated and fell all the way after rising in the early trading on Friday, reaching a low of 3152 (corresponding to the 0.786 retracement level of the 3120-3250 rising band), indicating that there is strong support at this position.
Hourly structure: Slow rise on Thursday and unilateral decline on Friday, which is in line with the technical characteristics of "second bottoming". If it can stabilize in the 3150-3160 area, it may usher in a rebound.
Key support and resistance:
Support below: 3150 (0.786 retracement level), 3140 (psychological barrier).
Resistance above: 3200 (short-term long-short watershed), 3250 (previous high).
Institutional views and market sentiment
Bearish factors: increased attractiveness of risky assets, technical correction pressure, and short-term cooling of geopolitical risks.
Support factors:
Inflation resilience: If subsequent tariffs push up prices, gold's anti-inflation properties will be highlighted.
Policy easing expectations: The start of the Fed's interest rate cut cycle may lower real interest rates, which is good for gold.
Buy on dips: The 3150-3160 area is the key support, and if it stabilizes, it may attract capital inflows.
Focus next week
Fed official speech: Any hint about the timing of rate cuts or inflation response will affect market expectations.
Geopolitical progress: Iran agreement, Russia-Ukraine negotiations and other progress may trigger fluctuations in risk aversion.
Key technical position competition: The effectiveness of 3150 support determines the short-term direction. If it is lost, it may drop to 3120.
Conclusion and strategy
Gold is suppressed by the rebound of risk appetite in the short term, but the technical side forms a key support in the 3150-3160 area. If it stabilizes, it is expected to rebound. Operational suggestions:
Medium-term investors: hold long orders near 3160, stop loss below 3140, target 3250.
Short-term traders: pay attention to the stabilization signal of the 3150-3160 support range. If the rebound breaks through 3200, you can follow the trend.
Risk warning: If it falls below 3140, you need to be alert to further corrections and adjust your positions flexibly.
Market performance review
This week, gold prices were under significant pressure, with a single-day drop of more than 2% on Friday and a cumulative drop of nearly 4% for the whole week, the worst single-week performance since November last year. The main drag factors include:
Trade tensions eased: The two major economies suspended the trade war for 90 days and planned to advance detailed negotiations, market risk appetite rebounded, and funds shifted from safe-haven assets to risky assets such as stocks.
Technical selling pressure: Futures traders took profits at high gold prices, triggering a chain of position adjustments.
Analysis of core influencing factors
Inflation data slowed down
The US CPI rose 2.3% year-on-year in April (previous value 2.4%), and core inflation was mild, indicating that price pressure was controllable.
Weak inflation data strengthened the market's expectations for the Fed to cut interest rates this year, but the rate cut is expected to be reduced from 100 basis points in April to 56 basis points, and the first rate cut may be postponed to September.
Fed policy trends
The Fed chairman's recent statement suggests that the monetary policy framework may be adjusted to cope with potential future supply shocks (such as tariffs pushing up inflation).
The current unemployment rate of 4.2% is close to full employment, and the decline in inflation has not significantly damaged the economy, providing room for policy adjustments.
Trade and geopolitics
Although the trade war has been suspended, the effective tariff rate of the United States is still at a historical high (13.1%), and the long-term drag on economic growth may limit the downward space of gold prices.
The situation in the Middle East and Russia and Ukraine has eased, further weakening the demand for safe-haven, but potential variables remain.
Technical analysis: Key support levels have become the focus of long and short competition
Short-term trend:
Gold prices fluctuated and fell all the way after rising in the early trading on Friday, reaching a low of 3152 (corresponding to the 0.786 retracement level of the 3120-3250 rising band), indicating that there is strong support at this position.
Hourly structure: Slow rise on Thursday and unilateral decline on Friday, which is in line with the technical characteristics of "second bottoming". If it can stabilize in the 3150-3160 area, it may usher in a rebound.
Key support and resistance:
Support below: 3150 (0.786 retracement level), 3140 (psychological barrier).
Resistance above: 3200 (short-term long-short watershed), 3250 (previous high).
Institutional views and market sentiment
Bearish factors: increased attractiveness of risky assets, technical correction pressure, and short-term cooling of geopolitical risks.
Support factors:
Inflation resilience: If subsequent tariffs push up prices, gold's anti-inflation properties will be highlighted.
Policy easing expectations: The start of the Fed's interest rate cut cycle may lower real interest rates, which is good for gold.
Buy on dips: The 3150-3160 area is the key support, and if it stabilizes, it may attract capital inflows.
Focus next week
Fed official speech: Any hint about the timing of rate cuts or inflation response will affect market expectations.
Geopolitical progress: Iran agreement, Russia-Ukraine negotiations and other progress may trigger fluctuations in risk aversion.
Key technical position competition: The effectiveness of 3150 support determines the short-term direction. If it is lost, it may drop to 3120.
Conclusion and strategy
Gold is suppressed by the rebound of risk appetite in the short term, but the technical side forms a key support in the 3150-3160 area. If it stabilizes, it is expected to rebound. Operational suggestions:
Medium-term investors: hold long orders near 3160, stop loss below 3140, target 3250.
Short-term traders: pay attention to the stabilization signal of the 3150-3160 support range. If the rebound breaks through 3200, you can follow the trend.
Risk warning: If it falls below 3140, you need to be alert to further corrections and adjust your positions flexibly.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.