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Pullback Has Not Concluded, and the Bullish Trend Remains Intact
Commodity
Summary:
While gold's safe-haven appeal has diminished, the fundamental, long-term rationale for holding gold remains intact.
Sell
CLOSEDXAUUSD
End Time
3280.00
Entry Price
3090.00
TP
3350.00
SL
3289.32 -28.16 -0.85%
7000
Points
Loss
3090.00
TP
3350.00
CLOSING
3280.00
Entry Price
3350.00
SL
Fundamentals
Yesterday, the U.S. reported that the April CPI rose 2.3% year-over-year, below the market expectation of 2.4%, core CPI rose 2.8% year-over-year. Despite inflation cooling for the third consecutive month, Federal Reserve officials continue to emphasize the need for "sticky inflation to maintain high interest rates." Market expectations for a June rate cut have significantly decreased to 68%, with a total of only 51 basis points of rate cuts expected for the year. The U.S. Dollar Index stabilized above the 100 threshold, while the 10-year Treasury yield held steady at 4.47%. The real interest rate (nominal interest rate minus inflation) rose to -2.26%, significantly increasing the opportunity cost of holding gold.
Subsequently, in the tariff adjustment agreement that took effect today between China and the U.S., the U.S. removed 91% of the additional tariffs on Chinese goods and suspended 24% of the reciprocal tariffs for 90 days. China simultaneously removed 91% of its retaliatory tariffs and suspended 24% of its retaliatory measures. This agreement substantially eased pressure on the global supply chain, leading to a shift in market risk appetite towards risk assets such as stocks. Gold ETFs saw a single-day outflow of 1.2%, reflecting the accelerated withdrawal of safe-haven funds.
Furthermore, the easing of expectations for Russian-Ukrainian peace talks and the implementation of the India-Pakistan ceasefire agreement have mitigated market concerns regarding escalation, with the marginal easing of geopolitical risks further diminishing the safe-haven premium of gold.
However, the medium- to long-term support logic for gold has not been entirely dismantled. Continuous gold purchases by global central banks (net increase of 244 tons in the first quarter of 2025) and the credit risk of the U.S. dollar (U.S. debt exceeding US$36 trillion) still provide structural support for gold. The People's Bank of China has increased its gold holdings for six consecutive months, reflecting the deepening of the "de-dollarization" strategy, while the U.S. government's debt ceiling crisis continues to challenge the credit of the U.S. dollar, which may reactivate the safe-haven demand for gold during repeated trade negotiations.
Technical Analysis
In the 4H timeframe, the current candlestick patterns for gold are exhibiting a high-level consolidation phase. The price has retested the 3200 level twice without a breakdown, indicating a degree of support, which suggests a potential for an upward rebound. However, the recent breach of the MA144 by the candlesticks increases the likelihood of a short-term bearish trend.
Currently, gold is supported at the 3200 level and may experience a short-term rally to test the 3290 resistance level. If bearish signals emerge at this resistance, gold could retest the 3200 support. A break below 3200 would likely open further downside potential, with the initial target at 3170, and potentially extending to 3083.
Trading Recommendations
Trading Direction: Sell
Entry Price: 3280.00
Target Price: 3090.00
Stop Loss: 3350.00
Valid Until: May 28, 2025 23:00:00
Support: 3200.00, 3083.93
Resistance: 3265.39, 3291.17
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