Zhang Yaoxi: Powell Signals Dovish Tone, Gold Prices Bottoming Out with Volatile Fluctuations Still Awaiting a Rise

March 31: On the previous trading day, Monday (March 30): International gold traded volatile and finished higher, maintaining the recent choppy range. It was also somewhat less sensitive to the strengthening in crude oil and the U.S. dollar. At the same time, Powell’s dovish signals—still keeping long-term inflation expectations in check—led the market to pull back its bets on the Federal Reserve raising rates this year. This suggests that after bottoming and consolidating, gold may once again turn stronger and climb higher, returning to or even moving above the $5,000 level. On the downside, focus is on support at the bottom of the recent trading range, and on entering near the lower band support of the Bollinger Bands.

Specifically, in terms of price action, gold opened lower at the start of the week at $4,484.99 per ounce, then first traded sideways but drifted lower to record an intraday low of $4,420.00. After that, it turned around and rebounded, extending through the late European session to hit an intraday high of $4,580.38. From there, it encountered resistance and pulled back. The U.S. session saw generally weaker performance, continuing until the end of the day when it fell below $4,500, before stopping the decline somewhat. It ultimately closed at $4,510.91, with a daily trading range of $160.38. Compared with Friday’s close of $4,505.63, it rose by $5.28, an increase of 0.12%.


Looking ahead to today, Tuesday (March 31): International gold opened with an initial drift of trading volatility that was slightly weak. It was constrained by resistance pressure, as well as limited by the stronger open in the dollar and crude oil. However, the downside pressure is also expected to be limited;


At present, the buying demand for technical support is relatively strong, with gold staying consistently above the 200-day moving average, which clearly reduces the pressure from short sellers. In addition, although the situation in the Middle East continues, the inflation concerns triggered by the rise in crude oil have also been easing further. Even if crude oil rises to $200 per barrel in the future, it still has a hard time producing a bearish scenario for gold. As inflation increases, it also raises gold’s commodity attributes and its anti-inflation role, and it would also increase economic uncertainty—yet there is both a logic for strength and demand.


Additionally, compared with the two oil-price rally doubling episodes from 2020 to 2022—such as July 2007 to August 2008—after those periods, gold also entered a bull market. Therefore, today’s rise in oil prices is also creating opportunities for a bull market in the second half of the year or next year.


Furthermore, U.S. Treasury Secretary Bessent said the global oil market supply is sufficient, and the finance ministers of the Group of Seven also said they are ready to take all necessary measures to maintain stability in energy markets. Meanwhile, Federal Reserve Chair Powell said he will wait and observe the impact of the war on the economy and inflation and is not considering rate hikes for now. Federal Reserve governor Mielan also said the Fed could gradually cut rates by one percentage point within a year. Based on this, interest-rate futures show that the market has backed away from its bets on the Fed raising rates this year, pricing in an approximately 3 BP rate cut by the end of the year.


So, I am more inclined to believe that this leg of the gold-price decline is still only an intermediate correction within a larger upward cycle. Over the next year, it is expected to climb higher and refresh highs again after several months of consolidation.


Technically, at the monthly level, gold has continued to show weakness this month. It once managed to recapture the gains from the previous three months, suggesting a tendency to reverse into a bull-market pattern. However, it has not yet materially broken below the support level of the prior uptrend line. If this month’s closing price is above that level, then the outlook would be for continued choppy consolidation adjustments, along with expectations of further upward climbs afterward. Conversely, there would still be the risk of probing to new lows. At the moment, I still lean toward the former.


At the weekly level, gold closed last week with a clearly long lower shadow, forming a stop-the-fall and bullish-looking pattern. This week, although it failed to strongly extend that rebound expectation and lift decisively, currently the choppy trading and the fact that it has not fallen further while recovering the area of the lower shadow suggests that there remains an expectation for renewed strength in the future. Near-term resistance is still to watch the Bollinger Bands’ midline resistance. Also watch resistance from the short-term moving averages, specifically the 5- to 10-week moving averages. If gold breaks above and holds this resistance, it will once again refresh its highs. Otherwise, it will likely maintain a wide-range sideways fluctuation.


On the daily chart, gold is maintaining range-bound volatility and has not yet returned above the 100-day moving average, but the 200-day moving average below remains firmly in place. Based on the past three months’ choppy trend channel, gold is currently in the rebound phase. Therefore, after this consolidation and sideways trading, I personally still lean toward an upward climb, continuing to wait for a move to either the $4,700 or $5,000 level.


Gold: On the downside, watch support near $4,470 or $4,400; on the upside, watch resistance near $4,565 or $4,655.


Silver: On the downside, watch support near $67.70 or $66.30; on the upside, watch resistance near $71.70 or $73.10;





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