Gold prices weakened on March 27, primarily driven by a confluence of negative factors that fueled market selling sentiment. Firstly, expectations for Federal Reserve interest rate cuts continue to be pushed back, with persistent hawkish signals. High and stable U.S. Treasury yields, coupled with a strong U.S. dollar, have directly increased the holding cost of gold. This has significantly diminished the appeal of non-yielding gold assets, leading to evident capital outflows. A further slight reduction in the SPDR Gold ETF holdings has intensified the selling pressure. Secondly, safe-haven demand stemming from Middle East geopolitical tensions has temporarily cooled, as market concerns about an escalation in regional conflicts have eased. The subsequent withdrawal of safe-haven funds that previously supported prices caused gold to quickly lose its upward momentum. Additionally, slightly eased inflation concerns and overall weaker volatility in commodities have indirectly reduced the demand for gold as an inflation hedge. The combination of these multiple negative factors directly led to a one-way decline in gold prices during the session.

From an Elliott Wave perspective, the price action suggests an ABC corrective pattern began after the peak at $5597. 1. Wave A decline: From $5597 to $4402. This was the initial bearish impulse wave, characterized by a deep and rapid decline. It completely broke the previous uptrend, releasing selling pressure from both trapped longs and profit-taking, thereby setting a medium-term bearish tone. 2. Wave B rebound: From $4402 to $5419. This was a weak corrective wave. The rebound lacked strength and failed to surpass the prior high of $5597, indicating exhaustion of bullish momentum and confirming this move as a medium-term correction rather than a minor pullback. 3. The gold price is currently considered to be in the core C-wave decline phase, typically the largest and most sustained wave within an ABC correction. This C-wave can be subdivided into a 5-wave structure and is likely in its later stages. As of March 26, the internal waves of the C-wave appear to have completed: C-1 decline (5419→4996), C-2 minor rebound (4996-5238), and the C-3 accelerated decline (5238-4098). The rebound from the recent low of $4098 to around $4603 this week suggests two potential scenarios moving forward.

The first scenario, indicated by a white line on the chart, is that the C-wave has concluded at $4098, and a new upward trend has begun. After rising to $4603 and experiencing a corrective dip, if the price holds above $4063 on a retest, it could resume its ascent, likely breaking above $4603 and potentially forming a leading diagonal pattern.

The second scenario, indicated by a yellow line, is that the C-wave is not yet complete. The current price action would then represent a C-4 wave rebound. After this C-4 correction concludes, a final C-5 wave decline would complete the entire C-wave. In this case, a move down from $4603 would likely break below this level but hold above $4098 (a break below $4098 would suggest an early start to C-5). A subsequent rebound would likely fail to surpass $4603 before the C-5 decline commences.

In the short term, gold exhibits a volatile, bearish-leaning posture. Technically, on the daily chart, prices are suppressed by the bearish alignment of the 10 and 20-day moving averages. The Bollinger Bands show no signs of contracting, indicating ongoing bearish momentum. The recent break below the key $4500 support level triggered significant stop-loss orders, reinforcing the weak structure. On the 1-hour chart, while the RSI is in oversold territory and the KDJ shows tentative signs of turning higher, suggesting potential for a technical rebound, trading volume has not significantly increased, indicating weak buying support. Immediate support is clustered in the $4360-$4370 per ounce range, with stronger support at $4306. Initial resistance sits at $4450, with stronger resistance at $4500. A hold above $4350 on a dip could present a short-term bounce opportunity. A break below $4306 would open the path for a further decline towards the previous low near $4100. Any rebound towards $4450 is likely to encounter selling pressure, making a sustained break above key levels difficult in the near term.

Trading Strategy: A cautious approach is advised, with strict position and risk management. Consider light short positions if the price rallies to the $4440-$4450 resistance area and shows signs of rejection, with a stop-loss above $4460 and targets near $4400-$4370. Alternatively, consider light long positions if the price stabilizes upon a pullback to the $4370-$4380 support zone, with a stop-loss below $4340 and a target around $4420.