Market Sentiment Improves! Gold Consolidates at the Bottom

Summary:

Expectations for a ceasefire in the Middle East have dealt a heavy blow to oil prices and eased concerns about inflation and rising interest rates. This has pushed down U.S. Treasury yields and the U.S. dollar, while also providing much-needed support for precious metals.

BUY XAUUSD

EXP

PENDING

4330.00

Entry Price

5000.00

4000.00

4556.64 +81.22 +1.81%

Pips

PENDING

4000.00

Exit Price

4330.00

Entry Price

5000.00

Fundamentals

In terms of geopolitics, there are signs of de-escalation in the Middle East. It is reported that the US is working on a one-month ceasefire agreement with Iran, and Pakistan has confirmed its willingness to provide a platform for the U.S.-Iran talks.

The agreement framework includes 15 conditions, covering core issues such as nuclear programs, missile capabilities, and the transit through the Strait of Hormuz.

The key demands of the US include: dismantling Iran's existing nuclear capabilities, committing to not developing nuclear weapons, banning domestic uranium enrichment, transferring approximately 60% of its high-enriched uranium stockpiles, dismantling nuclear facilities such as Natanz, Isfahan, and Fordo, and accepting comprehensive inspections by the International Atomic Energy Agency.

In addition, the US has also demanded that Iran stop providing financial, command, and weapons support to armed regional allies, restrict the scale and range of its ballistic missile program to defensive purposes, and ensure the unimpeded passage of the Strait of Hormuz.

In exchange, Iran could receive the full lifting of international sanctions, U.S. support for the development of its civilian nuclear programs, and the cancellation of the "snapback sanctions" mechanism.

The proposal of this agreement framework means that the US has begun to formally consider regional ceasefire arrangements. Media reports indicate that the highest-level talks between the US and Iran may start as early as this Thursday, but Iran has not yet made an official response.

From the perspective of fund positions and market sentiment, the holdings of SPDR Gold Trust, the world's largest gold ETF, increased by 0.286 tons from the previous trading day, with the current total holdings at 1,052.991 tons, indicating that some funds have re-entered the market after gold's earlier correction.

Technical Analysis

On the 4-hour timeframe for gold, Bollinger Bands are expanding downward with MAs diverging lower, showing a bearish price trend. Prices are fluctuating near the EMA12 and the middle Bollinger Band.

The MACD has formed a golden cross, with the fast and slow lines pulling back toward the zero axis and currently remaining at a considerable distance, indicating that the rebound is not yet complete. The RSI stands at 49, entering the neutral zone and suggesting that bearish sentiment has eased.

On the daily chart, after prices broke below the EMA200, they found strong support near the MA200, entering a short-term rebound trend.

Prices are likely to rebound toward the psychological level (4600) and the EMA12 (4740). The daily charts with long lower shadows for two consecutive days signal an impending rebound. The RSI is at 35, reflecting strong bearish market sentiment. Therefore, a strategy of buying on dips is recommended.

Market Sentiment Improves! Gold Consolidates at the Bottom_1

Market Sentiment Improves! Gold Consolidates at the Bottom_2

Trade Recommendations

Trade Direction: Buy

Entry Price: 4330

Target Price: 5000

Stop Loss: 4000

Support: 4225/4100/4000

Resistance: 5000/5100/5600

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Market Sentiment Improves! Gold Consolidates at the Bottom

Risk Disclosure