March 20: In the previous trading session on Thursday (March 19), international gold prices fell significantly and closed lower. Global central banks remain vigilant against a resurgence of inflation, and markets have begun hedging against the possibility of a Federal Reserve interest rate hike within the year. This led to a larger-than-expected decline in gold prices. However, the drop touched a low point as anticipated, once again testing below the middle Bollinger Band on the weekly chart. Although prices stabilized and rebounded from this level, a significant decline in the U.S. dollar index and crude oil prices limited further losses for gold. Whether the decline can be halted and reversed into an upward trend depends on whether prices can maintain a sideways consolidation or rebound above the 5,000 mark in subsequent sessions. If prices continue to fall and break below the 4,300 level, it would signal a reversal of the bullish outlook, potentially leading to a further decline towards the 3,500 or even 3,000 marks.
In terms of specific price action, gold opened the Asian session at $1,831.49 per ounce. After an initial rise to the session's high of $1,866.95, it encountered resistance and began a sustained decline, continuing into the U.S. session where it hit a low of $1,502.96. Prices then found a bottom and rebounded, ultimately closing at $1,650.45. The daily trading range was $363.99, with a closing loss of $181.04, representing a decline of 3.75%.
Looking ahead to today, Friday (March 20): International gold opened with narrow, sideways fluctuations. The price showed some weakness in early trading, pressured by a rebound in the U.S. dollar index. However, the dollar index has now fallen below its short-term moving averages, with bears currently in control. The weekly chart shows a bearish engulfing pattern, suggesting a potential top and further downside in the coming week or two, which would be supportive for gold. Meanwhile, crude oil prices fell yesterday, erasing Wednesday's gains, and the outlook for oil also appears weak. Therefore, over the next week or so, gold prices are biased towards a rebound. However, whether they can regain significant strength depends on whether market sentiment shifts from inflation and interest rate policy concerns towards safe-haven demand driven by geopolitical risks.
Fundamentally, recent spikes in oil and natural gas prices, fueled by conflicts, have intensified inflation concerns. This has reduced the likelihood of interest rate cuts by central banks, creating a bearish environment for gold. Global central banks' wariness of resurgent inflation has led markets to begin pricing in potential Fed rate hikes, reversing the broader safe-haven demand and consequently putting downward pressure on gold prices. However, oil prices have failed to strengthen further after recently touching around $119.50 per barrel. Bullish momentum has waned, and the U.S. dollar index has also begun to weaken, alleviating some of the immediate inflation concerns. As time passes, the market continues to digest this round of panic, and gold may be poised for a new wave of strong gains. In the short term, close attention must be paid to the Fed's potential rate-cut timeline and developments in the Middle East situation. Risks such as global inflation exceeding expectations or an escalation of geopolitical conflicts remain potential sources of pressure on gold prices.
Technically, on the monthly chart, gold prices have continued to weaken this month, erasing February's gains. A bearish engulfing pattern is forming, suggesting a potential top and indicating a possible pullback towards the ascending trendline breached in January. If prices can consistently hold above this trendline in the future, the expectation for continued gains over the coming years remains intact. Conversely, a break below could signal a bearish turn, potentially leading to a decline towards $3,500 or even the $3,000 mark.
On the weekly chart, gold prices have been declining consecutively and have, as expected, retested the area around the middle Bollinger Band and the 30-week moving average. Historically, such action often leads to a period of sideways consolidation before a renewed upward move begins. Key support to watch is the 30-week moving average. As long as prices hold above this level, the prospect of a renewed bull market and new highs remains. However, a break below this support could lead to a further decline towards the support near the 60-week moving average around $3,880, which would signal the end of the bull market and likely lead to an extended period of sideways adjustment in the coming years.
On the daily chart, gold prices rebounded after testing below the 100-day moving average. If prices can maintain levels above this moving average in subsequent trading, a rebound to recover recent losses is possible. However, if the decline continues, a test of $4,300 or $4,100 is likely. For the short term, the strategy leans towards looking for rebounds near support levels and considering short positions near resistance for intraday trades. Key resistance to watch is the lower Bollinger Band, while support is focused around the 100-day moving average.
For specific, real-time trading guidance, please refer to live account information. Preliminary intraday trading level ideas are for reference only; specific entry and exit points are subject to real-time account notifications: Gold: Support levels to watch are around $4,600 and $4,520; resistance levels are around $4,720 and $4,820. Silver: Support levels to watch are around $70.70 and $68.00; resistance levels are around $75.70 and $79.00.