Market Risk Aversion Cools, Gold Weakens in Short-Term Swings

Last Friday, we believed that the market was anticipating a small-scale ceasefire agreement between Israel and Hamas, which halted the rise of gold and led to a consolidation phase. We advised everyone to pay attention to the support at $2,722, followed by $2,714, and to watch for a breakthrough near $2,738. Upon breaking upward, continue to monitor $2,743 and $2,754.

Looking at the subsequent trend, gold fell back to stabilize at $2,723 and rebounded to $2,732 where it encountered resistance. After losing support near $2,722, it fell to a low of $2,717. Gold quickly stabilized and rebounded, rising to $2,729 where it encountered resistance again. After stabilizing at $2,723, gold continued to fluctuate upwards and closed at $2,747. On Monday, gold opened with a gap lower and is currently trading near $2,726. Overall, gold rebounded near the support levels of $2,714 and $2,722 that we provided, maintaining a short-term fluctuation in a consolidation trend.

The main reason for the gold rally last Friday was Israel's retaliation against Iran, launching three waves of airstrikes targeting Iran's air defense systems, missile and drone bases, and production facilities. The risk-avoidance sentiment supported the rise in gold prices. However, after the attack, Israel stated that it had achieved its predetermined objectives. Since Israel's attack avoided oil infrastructure, the upward trend in gold was relatively moderate.

After the gold market closed, the United States expressed hope that the attack would mark the end of tensions in the Middle East. Additionally, Iran also stated that it does not seek war and has the right to respond to the raid but will prioritize achieving a lasting ceasefire in Gaza and Lebanon. Due to Israel's loud but small impact and Iran's restrained response, market risk-avoidance sentiment cooled, leading to a gap lower at the opening of gold on Monday.

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On the daily chart, after gold refreshed its historical high, the upward momentum was temporarily halted, maintaining a high fluctuation above $2,700. For support, pay attention to the lower rail of the 4-hour Bollinger Bands at $2,712, which is also near the 10-day moving average on the daily chart, followed by the round number of $2,700; for resistance, pay attention to the breakthrough of the middle rail of the 4-hour Bollinger Bands at $2,734, which is also the position of the 5-day moving average on the daily chart. Upon breaking upward, continue to monitor the high point of last Friday near $2,747. The 5-day moving average has significantly slowed down, the MACD indicator has turned down after a golden cross, and both the KDJ and RSI indicators have formed a death cross, indicating that gold has a short-term technical adjustment need.

Intraday gold reference: Due to Israel's loud but small impact on Iran's attack and Iran's restrained response, market risk-avoidance sentiment has cooled, and gold opened with a gap lower, showing a short-term weak fluctuation. It is recommended to treat the operation with a consolidation mindset, with support at $2,712, followed by $2,700, and resistance at $2,734, with a focus on $2,747 upon breaking upward.