Jiang Muyang: How much longer will it take for gold prices to rise? Today's gold trend and future market structure analysis

On March 27, today’s weakness in gold primarily stems from multiple negative news resonances, dominating market short-selling sentiment. Firstly, the Federal Reserve’s interest rate cut expectations continue to be postponed, hawkish signals remain, U.S. Treasury yields stabilized at high levels, and the dollar index is operating on the stronger side, directly increasing the holding costs of gold, significantly reducing the attractiveness of non-yielding gold assets, with clear signs of capital flight. The SPDR Gold ETF has again slightly reduced its holdings, further exacerbating selling pressure. Secondly, the geopolitical risk aversion sentiment in the Middle East has temporarily cooled, and market concerns over regional conflict escalation have eased. The risk-averse funds that previously supported gold prices have exited in bulk, and after losing the risk-hedging support, gold prices quickly lost upward momentum. Moreover, market inflation concerns have slightly eased, and overall commodity volatility has been weak, which indirectly weakened the demand for gold as an inflation hedge. The combination of multiple negative factors has directly led to a unilateral decline in gold prices during the day.

From a wave structure perspective, the market has initiated an ABC three-wave adjustment structure after peaking at 5597 and falling back,

1. Wave A decline: 5597 USD → 4402 USD, is the first round of bearish force, with a deep decline and fast rhythm, completely breaking the previous unilateral upward pattern, releasing high-position trapped and profit-taking selling pressure, establishing a mid-term bearish tone.

2. Wave B rebound: 4402 USD → 5419 USD, is a weak corrective wave, with weak rebound strength, failing to break through the previous high of 5597 USD, the bullish momentum has completely exhausted, confirming that this round of market is a mid-term adjustment, rather than a short-term minor pullback.

3. The current core operation of the gold price is in the C wave main decline phase, which is the largest and most persistent wave of decline in the entire ABC adjustment. Currently, it can be subdivided into 5 wave structures, and it has now entered the latter half. As of March 26, the internal structure of wave C has completed the C-1 wave decline (5419→4996), a small rebound in C-2 wave (4996-5238), and accelerated probing in C-3 wave (5238-4098). This week, gold touched bottom at 4098 and rebounded to around 4603, with two potential changes in the future; as shown in the figure:

One scenario is that wave C has ended, indicated by the white line in the figure, gold will start a new upward trend from 4098. This week, gold rose to 4603 and then fluctuated downwards. In the future, if it tests back without breaking below 4063, it will start to rise, with a high probability of breaking through 4603, forming a guiding wedge pattern.

The other scenario is that wave C has not ended, indicated by the yellow line in the figure, and the current market is in the C-4 wave rebound correction; after the C-4 correction is completed, it will start a C-5 wave decline, completing the entire C wave. There is a high likelihood that the price will break below 4603 but not below 4098 (breaking below 4098 would prematurely enter C-5), and then the rebound is unlikely to break above 4603, leading to a further decline and starting the C-5 wave decline.

In the short term, gold is showing a volatile bearish pattern. From a technical perspective, the daily level is under pressure from the bearish arrangement of the 10 and 20-day moving averages, and there are no signs of the Bollinger Bands closing, indicating that bearish momentum is still being released. Previously, gold broke below the critical support level of 4500 USD, triggering a large number of programmed stop-loss orders, further reinforcing the weak pattern. Looking at the 1-hour chart: Although the RSI indicator is at a low level and the KDJ indicator shows signs of a turn, indicating some oversold correction demand, the trading volume has not significantly increased, and buying support is insufficient, leading to weak rebound strength. The first support level is concentrated in the range of 4360-4370 USD/ounce, with strong support at 4306 USD/ounce; the first resistance level above is 4450 USD/ounce, with strong resistance at 4500 USD/ounce. If it tests down to 4350 USD and stabilizes, there may be a short-term rebound opportunity; if it breaks below 4306 USD, it will open up further downside space to test the previous low of 4100. If it rebounds to around 4450 USD, it is highly likely to encounter selling pressure and fall back, making it difficult to break through the key range in the short term.

Operational strategy: The operation suggestion should focus on stability, strictly controlling positions and risks: a light short position can be taken if it rebounds to 4440-4450 USD/ounce and meets resistance, with a stop-loss above 4460 USD, targeting 4400-4370 USD; if it falls to 4370-4380 USD/ounce and stabilizes, a light long position can be tried with a stop-loss below 4340 USD, targeting around 4420 USD.

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Editor: Chen Ping