Geopolitical conflicts and expectations of interest rate hikes weighed on gold prices.

Political

Commodity

Summary:

Escalating conflict in the Middle East, rising inflation expectations, and strong non-farm payroll data have increased expectations of a Federal Reserve rate hike, putting downward pressure on gold prices. The battle to defend the $4,300 level has begun.

SELL XAUUSD

Close Time

CLOSED

4298.06

Entry Price

4251.00

4325.00

4113.65 -27.24 -0.66%

269.4

Pips

Loss

4251.00

4325.74

Exit Price

4298.06

Entry Price

4325.00

Fundamentals

Over the weekend, Iran launched multiple missile strikes against Israel, escalating tensions in the Middle East. This geopolitical conflict has led to rising oil prices and inflation expectations. Coupled with last week's much stronger-than-expected non-farm payroll data, which increased the probability of a Federal Reserve interest rate hike, these factors have exerted strong downward pressure on gold. At least in the short term, gold is clearly under pressure.

Technical aspects

Geopolitical conflicts and expectations of interest rate hikes weigh on gold prices_1

From the daily chart, XAUUSD has been fluctuating and falling from its high, showing a downward trend. After the release of the non-farm payroll data last Friday, it fell sharply during the day, breaking through the previous low support, and the short-term trend is weak.

Geopolitical conflicts and expectations of interest rate hikes weigh on gold prices_2

Looking at the 1-hour chart, XAUUSD broke down, briefly falling below 4300. The rebound during the Asian and European sessions was weak, and the possibility of continued downward momentum remains. In the short term, it may fall further towards 4250.

The main strategy is to sell on rallies. You can try to sell short when the price rebounds to around 4315, with a target of around 4250 and a stop loss above 4220.

Trading advice

Trading direction: Short

Entry position: 4310

Target price: 4250

Stop loss level: 4325

Downside support levels: 4300/4250/4150

Upward resistance levels: 4320/4350/4372

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