Spot gold traded higher with volatility during the Asian session on Thursday, hovering around $4,053 per ounce, extending a technical rebound from recent lows. The precious metal had previously approached a seven-month low, with the current recovery primarily driven by a combination of macro policy expectations and geopolitical risk sentiment, as short-term market risk appetite showed a marginal decline.
The core driver for gold's resurgence stems from a repricing of Federal Reserve policy expectations. During the European Central Bank's forum in Portugal, Fed Chair Kevin Warsh noted that inflation expectations have moderated over the past month and reiterated that maintaining price stability remains the central policy objective. This overall neutral-to-mildly dovish stance was interpreted by markets as limiting the probability of near-term rate hikes, thereby weakening bets on a further intensification of the tightening path.
The market consensus is that the Fed has not signaled an imminent rate hike, reducing upward pressure on real interest rates and indirectly supporting gold. As the U.S. dollar index retreated and Treasury yields weakened, the holding cost for non-yielding assets like gold decreased, attracting some capital flows back into the precious metals market. Analysts at Evercore noted that the new Fed Chair has not exhibited an inclination for immediate rate hikes, reinforcing market expectations for a prolonged policy observation phase.
Concurrently, a marginal easing in geopolitical tensions is also influencing gold's safe-haven dynamics. U.S.-Iran negotiations, facilitated by Qatar, have made some progress. Market surveys indicate "positive developments" on certain memorandum-related issues, with an agreement to continue subsequent dialogue. U.S. Vice President Vance also described the discussions as "progressing smoothly," with nuclear talks expected to commence in later stages. As tensions cool down in phases, while safe-haven demand for gold persists, its risk premium is being unwound.
Amid these intertwined factors, the gold market is exhibiting a dual-driven structure of "policy expectation dominance + geopolitical sentiment disturbance." On one hand, the Fed's dovish signals are supporting a price floor; on the other, progress in negotiations is capping the upside for gold's safe-haven premium, making the rebound appear more technical in nature.
Technical Analysis: Daily Chart
From a daily chart perspective, gold prices are showing signs of stabilization following consecutive declines but remain in a corrective phase after a broader high-level consolidation and retreat. The current price has regained support above $4,000, with key short-term support zones concentrated around $3,980 and $3,920. A breach below these levels could lead to a retest of previous lows. Resistance levels are situated around $4,080 and $4,150, an area representing a previous congestion zone and a key battleground for bulls and bears.
Technical Analysis: 4-Hour Chart
On the 4-hour chart, gold shows a short-term low-level rebound structure, with the moving average system gradually shifting from bearish pressure to convergence, indicating some improvement in short-term momentum. The MACD indicator shows the bearish momentum histogram is continuously shrinking, suggesting downward momentum is waning, though a complete shift to bullish dominance has not yet occurred. If prices can stabilize above $4,050, a further test towards the $4,080 zone is possible, though the overall rebound may still be capped by cautious sentiment ahead of U.S. employment data.
Overall Outlook
Overall, gold is currently in a corrective phase following a mid-term adjustment, with the broader trend structure not yet fully reversed, but downward momentum has clearly weakened. Daily moving averages are beginning to flatten, indicating the market is entering a phase of directional choice. Short-term price action revolves around the key psychological $4,000 level, which will serve as the core area for a rebalancing of forces between bulls and bears. If upcoming U.S. employment data falls short of expectations, it would further strengthen expectations for rate cuts, potentially pushing gold to test previous resistance zones. Conversely, strong data could pressure prices back towards the $3,900 region.
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