Gold Price Analysis: introduction:


Gold prices have moved on the back of increasing optimism about the de-escalation of geopolitical tensions in the Middle East, more than a month after their outbreak. These tensions had caused gold to record its largest weekly decline in over forty years.

Analysts believe that this optimism may pave the way for a strong upward trend in the short term, especially if the temporary pause turns into a long-term truce, leading to the restoration of calm, particularly in energy markets.

Gold prices have risen to $4857 USD, achieving growth exceeding 2.5%, driven by news of a two-week suspension of operations in West Asia, which strengthens hopes for a final end to the unrest.

It is worth noting that gold witnessed consecutive declines exceeding 11% in March, for several reasons:

• Rising fears of inflation returning, which weakened expectations of interest rate cuts.

• Liquidation of gold to cover losses in stock portfolios.

• Selling pressure aimed at rebalancing investment portfolios.

• Some central banks' tendency to sell their gold reserves to confront local economic crises and support their national currency.

• The release of some reports from the World Gold Council indicating a decline in central bank sales during March compared to the same period last year.

Investors quickly welcomed the possibility of the two-week truce turning into a long-term cessation of hostilities, which revived hopes for inflation returning to its downward path and prompted central banks to consider cutting interest rates.

This has been reflected in markets repricing the Bank of England's decision to cut rates twice this year, coinciding with improved expectations for interest rate cuts by the Federal Reserve in upcoming meetings, specifically during the second half of the year.

Accordingly, gold price movements have become linked to several factors that require close monitoring:

• Developments in rapidly evolving geopolitical events.

• Ensuring the Strait of Hormuz is opened as soon as possible and in the best way possible.

• Awaiting inflation data for March and April.

Gold Price Analysis: Support and Resistance Levels and Trend Expectations!

Gold prices continue their gains for the third consecutive week, and the ounce price is currently stabilizing at its best levels in about a month after targeting levels close to $4800 per ounce. In detail, the attached chart shows the importance of levels near $4800 per ounce as a price resistance that must be overcome, with sustained trading above it to ensure the continuation of positive momentum.

Generally, the short-term trend for gold remains a downtrend, while it maintains its upward trend in the long term.