I. Analysis of core driving factors
Impact of liquidity run
China's 34% counter-tariff on the United States triggered a global sell-off of risky assets, triggering a cross-market chain reaction. In order to meet the margin requirements of assets such as stocks, investors were forced to reduce their gold positions, forming an "asset rebalancing" selling pressure.
This phenomenon has a similar logic to the "dollar shortage" that caused the gold price to plummet in the early stage of the epidemic in March 2020, but this time it may last for a shorter period of time.
Dual effect of non-agricultural data
Exceeding expectations of employment growth: 228,000 new jobs strengthened the narrative of "US economic resilience" and weakened the demand for safe havens.
Slowing wage growth: The cooling signs of the hourly wage rate of 3.8% per year may ease market concerns about the second rise in inflation and reduce the anti-inflation premium of gold.
Technical resonance with sentiment
Profit-taking after the historical high of $3,168 and the programmed selling of CTA strategies formed a positive feedback, exacerbating the decline.
2. In-depth analysis of key price levels
Cycle Support Resistance Technical Signals
Daily 3000 (psychological barrier) 3055 (previous low conversion) Bollinger middle rail lost
4H 3015 (Fibonacci 38.2%) 3068 (MA20 suppression) Downward channel established
Weekly 2975 (5-week moving average) 3080 (double top neckline) MACD top divergence prototype
Special form warning:
The double top structure formed by 3135-3080 points to the 3020-3000 area
If the 3000 barrier is lost, it may trigger algorithmic trading chain selling
3. Multi-dimensional trading strategy
1. Basic scenario (probability 60%): Maintain fluctuations in the 3000-3060 range
Asian session: 3015-3020 light long orders, stop loss 3007, target 3040
European session: 3052-3055 reverse short orders, stop loss 3063, target 3025
2. Breakthrough scenario (probability 30%):
Break above 3068: Go long after stepping back to 3058, stop loss 3049, target 3080-3090
Break below 3000: Rebound to 3012 short, stop loss 3020, target 2980-2975
3. Hedging strategy:
Buy 3040 put options (strike price 3000), and sell 3060 call options at the same time
IV. Monitoring of institutional trends
Changes in open interest of COMEX gold futures show that most of the new long positions above 3160 have been stopped
The daily outflow of gold ETF (GLD) hit the largest level since March, but the implied volatility of forward options is still high
V. Cross-market correlation indicators
Real yield of US Treasury bonds: If it rises above 2%, it will increase the pressure on gold
VIX index: needs to be closed Pay attention to whether it continues to be above the 20 threshold
Copper-gold ratio: The current trend suggests that the market risk appetite has not completely deteriorated
Six, warning of major events next week
Wednesday: US CPI data (key inflation verification)
Thursday: Fed March meeting minutes (pay attention to the statement of balance sheet reduction)
Friday: University of Michigan Consumer Confidence Index (inflation expectations sub-item)
Operation suggestions:
Position control within 5%, set a hard stop loss every 50 points
Prioritize the London gold period (15:00-17:00 GMT) with good liquidity
If there is a flash crash below 2970, you can arrange a 3% position mid-line long order
Special attention: The current market is in a "news sensitive period", it is recommended to use OCO orders (two-choice commission) to deal with sudden fluctuations. The technical side is bearish but oversold, and it is necessary to guard against the risk of retaliatory rebound.
Trade active
This week, the international gold price staged a "roller coaster" market. Spot gold continued to rise from Monday to Thursday, and on Thursday (April 3), it hit a record high of $3,167.57/ounce, but on Friday (April 4), it plummeted by more than $75 in a single day, a drop of 2.44%, and finally closed at $3,038/ounce, narrowing the weekly increase to 1.2%. Precious metals such as silver and platinum fell simultaneously, among which spot silver fell by 7.2% in a single week, the worst performance since September 2020.This sharp fluctuation was caused by two key events: Trump's tariff policy caused global concerns to rise, and Federal Reserve Chairman Powell unexpectedly turned to hawkish monetary policy. The market liquidity crisis caused investors to sell gold to make up for stock market losses, and the US dollar index strengthened by 0.9%, further suppressing gold prices.
Analysis of the core factors driving the market
1. The escalation of trade tensions triggers a liquidity crisis
Trump's tariff policy and the responses of many countries have intensified market concerns about global supply chain disruptions and slowing economic growth, and global stock markets have plummeted:
- The three major US stock indexes fell by more than 5.5% in a single day, and the Dow Jones Industrial Average plunged 2,000 points and entered a technical correction;
- The European Stoxx 600 index fell 4.1%, the largest single-day drop this year;
- Major Asia-Pacific stock indexes generally closed down more than 3%.
Suki Cooper, precious metals analyst at Standard Chartered Bank, pointed out: "As a highly liquid asset, gold is often used to meet margin calls in other markets. This sell-off is in line with historical laws, but it has not changed its long-term safe-haven properties."
2. The Fed's policy expectations took a sharp turn for the worse
Fed Chairman Powell's speech in Virginia on Friday became the "last straw" that broke the camel's back for gold prices. Its key statements include:
Inflation risk: The scale of Trump's new tariffs is "beyond expectations", which may lead to continued inflation;
Policy wait-and-see: The Fed needs to wait for data to become clear before deciding on monetary policy adjustments;
Economic warning: Although the job market is stable (228,000 new non-farm payrolls in March), the downside risk has increased significantly.
This statement completely dampened the market's expectations for a rate cut in June. Interest rate futures show that traders have lowered their expected rate cuts from 120 basis points to 80 basis points this year, and the attractiveness of US dollar assets has rebounded. Alex Ebkarian, chief operating officer of Allegiance Gold, believes: "Strong employment data and Powell's statement have formed a synergy, and the postponement of the expectation of a rate cut is bearish for gold in the short term."
3. Technical adjustment needs appear
After hitting a record high, gold prices themselves are under profit-taking pressure. Christian Borjon Valencia, an analyst at FXStreet, pointed out: "Gold prices need to hold the psychological level of $3,000. If it fails, it may fall to the 50-day moving average of $2,937; on the contrary, if it can regain $3,100, the bulls will still be in control."
Trade closed: target reached
The U.S. non-farm payroll data in March exceeded market expectations, but the unemployment rate rose. Regardless of whether it was true or not, it ultimately supported the rebound of the U.S. dollar. Powell said that interest rates would not be cut immediately. The U.S. Treasury Secretary said that the United States pursues a strong U.S. dollar policy. The above comprehensive factors provided support. The U.S. dollar rebounded, but it cannot be concluded that it has bottomed out. Gold was not spared, with an overall decline of more than 120 points. The weekly line recorded a negative column with a long upper shadow, ending four consecutive weeks of gains. The daily line entered the oversold zone after a series of negatives, but the overall trend is still downward.Combined with the long-term technical pattern, the strong support below the gold price is near 2950. Even if the price rebounds next week, it cannot be accompanied by strong event support. It is still possible to fall again to find the bottom, and the possibility of falling below the 3000 mark is relatively high.
Gold daily stochastic indicator top divergence dead cross, bearish signal, indicator dead cross, increase downward signal; but the middle track gradually moves up, it is expected that the middle track support will move up to the 3000-3020 range next week, therefore, the signal given by daily K is - daily K dead cross, biased towards continuous adjustment; but it faces 3 bullish supports in the middle; the first support is the middle track support around 3000; the second buying support is around 2950; the third buying support is around 2840;
Gold 1 hour moving average has formed a dead cross downward, so gold bears still have power, gold can only rebound in the short term, gold will continue to be short after the rebound, and then gold will enter a shock, gold will fall sharply from a high level in the short term, bears will have more advantages, unless there is a big positive, then it is difficult for gold to rise directly, the last real K line box of gold 1 hour will form a short-term suppression, gold rebound resistance 3076 line, if under pressure, then gold rebound or continue to be short at highs.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.