Gold market analysis

Last week, under the conflict between Israel and Iran, the gold price still faced pressure at the high level and failed to break through the new high. On Monday, gold prices opened higher. After Israel's air strike on Iran, although Iran was in a weak position, it was not willing to accept the attack. Over the weekend, it counterattacked Israel with missiles and drones. After testing the 3451 position, gold prices began to show pressure.

Gold prices were constrained by technical resistance at the top. Moreover, although the United States verbally supported Israel, it did not take any substantive actions. Iran also did not further attack military camps in Europe and the United States, and the battle line did not extend further. The market basically digested the news of the war last week, laying the groundwork for gold prices to fall back. During the midweek, the Federal Reserve held an interest rate decision. The market has highly expected the United States to maintain its interest rate unchanged, but investors are paying attention to the implications of the dot plot for future interest rates.

The US has kept its interest rate unchanged at 4.50% as expected. The latest dot plot indicates that it will cut interest rates twice by the end of the year, each by 0.25%, and will also cut interest rates by 0.25% again in 2026 and 2027. Interest rates have remained higher than the market's original expectations for the long term, and as a result, gold prices have been restrained and declined. The market did not see more tariff news to blow, but the high interest rate was unfavorable for the gold price. The gold price developed weakly throughout the week and failed to rise above 3,400, but the space for a significant pullback from the low level was also limited.

This week, the United States will release the PCE inflation data. There is a slight risk of contraction in the US labor market, but the Federal Reserve's intention to cut interest rates still needs to be closely watched. The trade war will eventually lead to an increase in the price level. If the PCE index rises this week, it may increase the Federal Reserve's determination to maintain high interest rates. On the contrary, if inflation is not high, it increases the bargaining chips for the Federal Reserve to cut interest rates. Technically, the gold market still tends to consolidate at a high level and is more suitable for short-term trading. Let's take a look at the market situation. You might as well refer to each other.