Gold Market Weekly Analysis

This week, gold opened with a pattern of first falling and then rising. The intraday low tested the 4672 area, after which it quickly moved to fill the gap and surged strongly, rising to around the 4709 area. It is currently trading near $4720. Last Friday, spot gold closed at $4708 per ounce, up 0.3%, but overall last week it fell by more than 2%, marking the first weekly decline in five weeks. Driven by concerns over inflation and uncertainty in the US-Iran situation, market sentiment has remained cautious.

From the basic news standpoint, the US-Iran second round of talks ended without results, turning into “empty talks.” Iran’s Foreign Minister proposed a three-stage negotiation plan, but no consensus was reached. Iran insists on refusing passive negotiations before the US lifts the port blockade, and the Strait of Hormuz will not return to its pre-war condition. With the US holding both military and economic leverage, senior US officials have even suggested ending the talks and resuming military strikes. The US-Iran geopolitical conflict has fallen into a long-term war of attrition, continuously disturbing market sentiment.

In terms of commodities and exchange rates, oil prices fluctuated and finished lower last Friday. Brent crude and US crude fell by 1% and 2.2%, respectively. However, boosted by concerns about supply disruptions, the two major oil contracts saw week-on-week gains of more than 10%. The US Dollar Index fell by 0.32% to 98.49 on Friday, influenced by the termination of Powell’s survey and optimistic sentiment regarding the negotiations. Nevertheless, the dollar posted a 0.3% week-on-week rise for the first time in three weeks, which raised the cost of holding gold and weighed on the price trend.

This week brings a “super week” for global central banks. The five major central banks, including the Federal Reserve and the Bank of Japan, will announce their interest rate decisions one after another. The market generally expects that major central banks will keep interest rates unchanged. In addition, US March PCE inflation data and Q1 GDP data will be released on April 30. These two key economic data points will directly affect gold’s outlook, so it is necessary to pay close attention.
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