Li Xinheng: Focusing on the US-Iran Ceasefire Agreement, Where Is Gold Heading

On Tuesday, April 7th, during the Asian market session, spot gold opened with oscillations and a slight decline after a brief sideways movement, currently trading around $4,650. Yesterday (Monday, April 6th), gold opened lower near $4,600, stabilized, and began to fluctuate upward, reaching a high of around $4,707 during the European session before encountering resistance and turning down. During the U.S. session, it showed a volatile decline, with the lowest point at about $4,645 in the early morning, and the daily chart closed with a small bullish candlestick with upper and lower shadows.

Basic news:

The Iran-U.S. conflict: Iran explicitly stated that it hopes to permanently end the war with the U.S. and Israel, but submitted a ten-point response to the U.S. through Pakistan, clearly ruling out the possibility of a temporary ceasefire, emphasizing the need to end the conflict permanently, and calling for the formulation of a security passage protocol for the Strait of Hormuz, sanctions removal, and post-war reconstruction. The passage volume through the Strait of Hormuz has risen to the highest level since early March. Trump said it would be better for the U.S. to collect tolls.

Regarding the Iran-U.S. conflict: On Monday, Trump further escalated his stance at a White House press conference, stating, “The entire country of Iran could be destroyed overnight, and that night could be Tuesday evening.” He reaffirmed that the deadline of 8 p.m. Eastern Time on Tuesday is “non-negotiable,” “highly unlikely to be postponed again,” and “won’t change anymore,” adding that Iran’s latest peace proposal is “significant but still not good enough.”

Other aspects: Influenced by Trump’s latest stern threats, U.S. crude oil (WTI) prices nearly surged throughout the trading day, currently around $115. Despite the Middle East conflict triggering safe-haven demand, U.S. stocks rose modestly early in the week, and oil prices soared. Additionally, the strong U.S. non-farm payroll data released last Friday further reinforced expectations of prolonged high interest rates, which is bearish for gold and silver prices.

Macroeconomic factors: Heavy data releases this week include the Federal Reserve’s March policy meeting minutes on Wednesday, U.S. initial jobless claims and Personal Consumption Expenditures (PCE) data on Thursday, and the Consumer Price Index (CPI) on Friday. The Chicago Mercantile Exchange FedWatch tool shows that traders currently see a very low probability of the Fed cutting interest rates this year, with rates remaining unchanged last month.

Technical analysis: From the daily chart of gold, it’s likely that today’s gold movement will also be dominated by consolidation and digestion. The resistance above focuses on the 5-day moving average at 4670-75, with main resistance near the 20-day moving average at 4730. Support below is mainly around the 10-day moving average at 4570. How the price breaks through this range may depend on news influences. If Iran and the U.S. reach a ceasefire agreement, even a short-term one, the dollar index could fall sharply, and gold may rebound, breaking through the 20-day moving average at 4730. However, the upside space remains limited, with attention on the 4800-4850 zone. If no agreement is reached and the conflict worsens, it could trigger further dollar appreciation, causing gold to fall below the 10-day moving average at 4570, resuming a downward trend.

Combining with the hourly chart: This morning, gold experienced another decline. The hourly structure shows a heavier downward shift, with the moving averages crossing downward, increasing the risk of further pullback. Therefore, intraday, gold can temporarily be expected to oscillate within a range, but the trend may lean toward correction and continuation of a pullback. Trading strategy: the main approach today can be to wait and see, pending whether Iran and the U.S. can reach a ceasefire agreement tomorrow. Although the probability is low, caution is advised, especially since “Teyou” (a nickname for a certain influential figure) is increasingly unreliable, making risk management difficult. For more aggressive traders, a range-bound approach can be adopted, shorting high and buying low within the range, but focus on high points and short positions at lower points.

Today’s trading suggestion: wait for a rebound near 4680 to lightly short with a stop loss at 4700, targeting around 4600. Given the potential for sudden news changes, conservative traders may prefer to stay on the sidelines for now.