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A Fierce Battle for the Monthly Close Begins, with Heightened Volatility Expected
Economic
Commodity
Summary:
According to the World Gold Council, escalating global trade tensions spurred a significant influx of investment into gold ETFs during the first quarter, thereby driving a 19% increase in gold prices within a three-month period.
Sell
CLOSEDXAUUSD
End Time
3302.51
Entry Price
3232.00
TP
3350.00
SL
4299.39 +20.10 +0.47%
7051
Points
Profit
3232.00
TP
3231.88
CLOSING
3302.51
Entry Price
3350.00
SL
Fundamentals
The World Gold Council (WGC) reported on Wednesday that global gold demand (including over-the-counter transactions) increased by 1% year-over-year to 1,206 metric tons in the first quarter of 2025, the highest quarterly level since 2016.
A significant rebound in gold ETF inflows drove total investment demand to 552 tons, a 170% increase year-over-year, the highest since Q1 2022. Demand for gold bars and coins remained robust at 325 tons, 15% above the five-year quarterly average. Global gold jewelry demand, a primary component of physical demand, decreased by 21% to 380.3 tons, the lowest level since the onset of the COVID-19 pandemic in 2020.
Central bank purchases, another key driver of gold demand, decreased by 21% to 243.7 tons in the first quarter.
Regarding key consumer markets, the Chinese market witnessed a surge in gold ETF demand, with inflows reaching a record high of approximately RMB 16.7 billion (equivalent to US$2.3 billion, or 23 metric tons) during the first quarter. This unprecedented influx, coupled with soaring gold prices, propelled the total assets under management (AUM) and total holdings of gold ETFs to new historical peaks, reaching RMB 101 billion (approximately US$13.9 billion) and 138 metric tons, respectively.
According to statistical data, the total consumer demand for gold in the Chinese market, encompassing gold bars, coins, and jewelry, amounted to 249 metric tons in Q1, reflecting a 15% year-over-year decrease, primarily due to subdued demand for gold jewelry.
Technical Analysis
Gold prices extended their decline for a second consecutive day, retesting the critical US$3,259 level before finding temporary support. Risk sentiment has waned once more, as indications mount that the U.S.-China trade dispute is de-escalating (a bearish signal for gold).
However, the broader outlook remains uncertain, with investors still wary of the lingering negative effects of global tariffs, which continue to fuel safe-haven demand. This dynamic suggests that gold prices may experience significant volatility in the long term.
The bearish catalysts for gold persist, with the 20-day SMA at US$3,259 serving as the primary support level. A breach of this level could see bears targeting the demand zone at US$3,247, with the 5-week SMA at US$3,232 as the subsequent support to monitor.
Given that today marks the end of the month, with a fierce battle for the monthly close underway, a strategy of range-bound trading around key support levels is recommended.
Trading Recommendations
Trading Direction: Sell
Entry Price: 3309
Target Price: 3232
Stop Loss: 3350
Valid Until: May 15, 2025 23:55:00
Support: 3259, 3247, 3232
Resistance: 3314, 3330, 3353
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