Gold market analysis

"Gold Price at $4,810 Marks First Resistance for Rebound" 20/3/2026 10:45 Finalized 

Yesterday, the gold price plunged sharply, with the spot gold price fluctuating by nearly 365 US dollars in a single day. It hit a low of 4,503.47 US dollars in the early trading session in New York. I believe there are two reasons for the sharp drop in the gold price. First, the Federal Reserve announced that it would maintain interest rates unchanged and did not lower the median target for the federal funds rate in the next three years. The rate for this year remains at 3.4%, and for the next two years, it remains at 3.1%, meaning that the rate will stop at 3% to 3.25%. I have pointed out that when the interest rate cut cycle ends, it is the time when the gold price rally ends. As we can see now, the interest rate cut cycle is approaching its end. I have also pointed out that this is not a zero-interest rate era. Holding cash offers a certain interest rate return, and both interest rates and gold have anti-inflation effects. Investors naturally choose cash with returns. 

On the other hand, Trump stated that the United States does not lack crude oil and there is no need to maintain the Strait of Hormuz shipping lane. China, Japan, South Korea and Europe are the main users of this shipping lane. Let them solve the problem themselves. Especially when the United States asked these countries to send warships to maintain the safety of the shipping lane and was refused, why should the United States still provide them with a protective umbrella? I have long said that when the US-Iran war will end depends on Trump. Once this statement was made, it was equivalent to the United States suspending further military actions against Iran. The direct reaction of the financial market was that the Middle East war eased, which was the main reason for the second wave of gold price decline. Of course, it is unknown whether he has other plans to catch Iran off guard when it relaxes its guard. 

Spot gold prices fell below the 50-day simple moving average (SMA) on the daily chart (currently around 4980) on Wednesday but failed to stage a strong rebound. Instead, they were further pressured by Trump's remarks and have now dropped nearly 300 dollars from the 50-day SMA, leaving considerable room for a rebound. This has attracted market players to cover their short positions. Moreover, the sharp decline yesterday pushed the 9-hour RSI to 5, indicating severe overselling and driving gold prices to gradually recover. Currently, gold prices are holding above the 20-hour SMA (currently around 4652). Gold prices are expected to rebound further within the day. As 4660 dollars is at a Gann level angle, if gold prices can hold above this level, the next significant resistance level would be at the 45-degree angle at 4810 dollars, which is very close to the 50-hour SMA (4808). Therefore, gold prices are likely to fluctuate between 4660 and 4810 dollars within the day. In a worse-case scenario, gold prices may fall again and form a double bottom on the hourly chart before rebounding. However, external risk events often occur on Saturdays or Sundays, so it is not advisable to hold positions over the weekend. 

The above content is for reference only and does not constitute investment advice.