Prime Time · Daily Gold Analysis: Gold Prices Rise and Fall, High Oil Prices Limit Upside Potential

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Source: Xinhua Finance

Xinhua Finance, Beijing, March 27 - On Thursday (March 26), the international spot gold price rose and then fell, closing down more than 2%. The daily candlestick chart shows a long bearish line, indicating that bearish forces remain strong, and short-term gold price rebounds are temporarily obstructed, entering a phase of secondary bottom testing.

From a fundamental perspective, the ongoing conflict between the U.S. and Iran continues to keep oil prices high, maintaining between $90 and $100 per barrel, which puts some pressure on gold prices. The rise in oil prices has enhanced the dollar’s safe-haven appeal due to its potential negative impact on the global economy, while the energy crisis has raised inflation expectations, potentially leading central banks around the world to adopt more hawkish monetary policies.

At the same time, central banks in Turkey, Russia, and other countries are selling off part of their gold reserves, while those that are still increasing their gold reserves have noticeably reduced their pace, making it difficult to support short-term gold prices.

Additionally, the number of initial jobless claims in the U.S. reported on the 26th rose slightly last week, indicating that the labor market remains relatively stable, providing support for the Federal Reserve to maintain interest rates. This also suggests that the upcoming March inflation data may become a key factor influencing monetary policy.

From a technical perspective, the monthly candlestick chart shows that gold prices quickly fell to the 4100 dollar level, where they halted their decline and rebounded. This is the first time in over a year that gold prices have retested the October moving average. Although the price fluctuations are significant, the current pullback may still be a minor episode in a long-term upward trend. After falling below 4680 dollars, gold prices are currently operating within a wide range of 4680 to 4200 dollars. After being blocked above the 4600 dollar level this week, gold prices began a second round of bottom testing.

In terms of short-term technical patterns, the short-term moving averages for gold prices remain in a bearish arrangement, and the overall trend is still downward. However, following the oversold rebound after 4100 dollars, gold prices have returned within the Bollinger Bands, and the downward speed of the 5-day moving average has begun to slow, currently positioned around 4430 dollars. The lower Bollinger Band has quickly moved down to around 4250 dollars, close to the 4220 dollar support area, which together form an important support level for current gold prices.

In summary, after reaching a short-term low of 4100 dollars, the gold price hit 4603 dollars and is currently in the process of confirming a secondary bottom test. The 50% retracement level and the Fibonacci retracement level are located around 4350 dollars and 4290 dollars, respectively, which, along with the 4250-4220 dollar area, form a triple barrier for the gold price to stop falling and rise again. However, from a medium to long-term trend perspective, gold prices are currently nearing the end of an adjustment period after approaching the high of 5600 dollars, and attention may be paid to right-side trading opportunities.

(Author is part of the research team at the Beijing Gold Economic Development Research Center)

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Editor: Zhu Henan