Short Covering Will Continue Until Selling Levels Are Reached

Summary:

Gold prices were pressured by liquidity selling and fluctuating inflation expectations, but the medium- to long-term upward trend remains intact. The market is currently repricing inflation, interest rate paths, economic growth, and the liquidity environment.

BUY XAUUSD

EXP

TRADING

4425.07

Entry Price

5200.00

4170.00

4556.40 +80.98 +1.81%

0.0

Pips

Flat

4170.00

Exit Price

4425.07

Entry Price

5200.00

Fundamentals

Recently, due to geopolitical disturbances, gold prices have become significantly more volatile, and there has been a temporary misalignment between market risk aversion and macro pricing logic.

From a driving framework perspective, gold price movements can be broken down into two levels: Long-term logic: U.S. fiscal deficit expansion → government debt accumulation → monetary and credit pressure. Short-term variables: Monetary policy path → changes in real interest rates → market liquidity conditions.

The primary catalyst for this round of gold price declines was the U.S.-Israel-Iran conflict, which drove up international oil prices and caused previously easing inflation expectations to resurface. The fluctuating inflation outlook has prompted the market to reassess monetary policy, and has even led to temporary pricing in of expectations that the Federal Reserve may resume interest rate hikes in 2026.

This shift has had two direct consequences: expectations of monetary easing have subsided, leading to an upward revision of the interest rate path; and liquidity has tightened, triggering pressure from forced selling. Therefore, the pullback in gold prices is essentially a liquidity-driven price reassessment, rather than a shift to a bearish trend.

Short Covering Will Continue Until Selling Levels Are Reached_1

Technical Analysis

From a medium- to long-term perspective, the core underlying logic remains solid: geopolitical conflicts are more likely to evolve into protracted standoffs rather than come to a swift conclusion. U.S. debt pressures are mounting further amid the conflict and fiscal expansion. Caught between high interest rates and rising debt costs, the Federal Reserve will find it difficult to maintain a tight monetary policy over the long term.

Given the policy trade-offs, monetary policy is likely to remain accommodative to ease the interest burden and support key industries (such as AI), and further rate cuts cannot be ruled out. Our conclusion is that short-term disruptions do not alter the long-term logic of credit expansion, and we remain bullish on gold over the medium to long term.

Trading Recommendations

Trading Direction: Buy

Entry Price: 4379

Target Price: 5200

Stop Loss: 4170

Valid Until: April 23, 2026 23:55

Support: 4385, 4306, 4325

Resistance: 4511, 4602, 4739

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data