FUNDAMENTAL OVERVIEW
Gold gave back most of its weekly gains after Trump disappointed the market in today’s speech. The market had been expecting something positive, especially after Trump seemed to support a WSJ report earlier this week, suggesting he might be open to ending the war with Iran without requiring the Strait of Hormuz to be reopened. Later that same day, Iran’s president also signalled willingness to end the conflict, provided there were guarantees.
It looks like the market wrongly ignored yesterday’s news though. In fact, Trump posted this on his Truth Social account:
“Iran’s New Regime President, much less Radicalized and far more intelligent than his predecessors, has just asked the United States of America for a CEASEFIRE! We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!! President DJT”
Trump self-imposed a 5-day ceasefire last week, then extended it by another 10 days (set to expire on April 6). At the same time, he made it clear that any ceasefire would depend on reopening the Strait, despite having downplayed that condition just a day earlier. He also ended his message with the usual threats.
Moreover, the White House indicated ahead of the speech that Trump would reiterate a 2–3 week timeline for ending the war. That stretches well beyond the current ceasefire window, leaving plenty of room for tensions to escalate again.
In that context, the market’s rally into the speech was really short-sighted, and it’s not surprising that those gains quickly evaporated. Looking ahead, we’re essentially back to square one. Optimism may need to be priced out further, which should keep the bearish bias intact, at least until the 4,000 level (all else being equal).
GOLD TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that gold got rejected around the confluence of the broken upward trendline and the downward trendline. The sellers stepped in there with a defined risk above the downward trendline to position for a drop into the 4,000 level. The buyers will need to see the price breaking higher to increase the bullish bets into the 5,000 level next.
GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can see the price broke below the upward trendline that was defining the pullback into the major downward trendline. The sellers will likely pile in around these levels with a defined risk above the broken trendline and target the 4,000 level. The buyers, on the other hand, will wait for the price to break above the downward trendline to pile in for a rally into the 5,000 level.
GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can see the price is trading near the lower bound of the average daily range for today. In such instances, we can generally see a pullback or some consolidation before the next move.
UPCOMING CATALYSTS
Today we get the latest US Jobless Claims figures. Tomorrow, we conclude the week with the US NFP report.
