Zhang Yao Xi: US to Pause Fighting for One Month, Gold Price Rebounds from Bottom with Increased Bullish Expectations

Zhang Yaoxi: U.S. plans to pause fire for a month, gold prices rebound from lows, bullish expectations increase
On the previous trading day, Tuesday (March 24): International gold rebounded and closed higher after hitting a bottom. Amid reports that the U.S. plans to establish a one-month ceasefire, gold prices surged in the late session. It closed above the 144-day moving average, with consecutive long lower shadows indicating a bullish reversal pattern. This suggests the recent decline has clearly bottomed out, and the market is expected to rebound, aiming for targets of $4,700 or $5,100.
In terms of specific movement, gold opened at $4,412.83 per ounce during Asian trading, briefly dipped to an intraday low of $4,305.98, then oscillated and gradually rose. By early morning, it quickly broke through intraday resistance and the opening price, reaching an intraday high of $4,484.03. It ultimately closed steady at $4,474.34, with a daily range of $178.05, up $61.51, a 1.39% increase.
Looking ahead to Wednesday (March 25): International gold continued its overnight rebound at the open, strengthening further. The U.S. dollar index and crude oil prices were initially weak, providing some support. Additionally, mediators from Turkey, Egypt, and Pakistan are pushing for a meeting between U.S. and Iranian officials within the next 48 hours. The U.S. intends to propose a one-month ceasefire plan to discuss a 15-point agreement aimed at ending the war with Iran, which has shifted geopolitical risks and supported gold prices.

However, these factors are only expectations; until substantial negotiations produce concrete results, gold’s rebound is likely limited, possibly entering a consolidation phase.
Recent oil price increases due to the Strait of Hormuz blockade have reignited inflation concerns and shifted market expectations from rate cuts to possible rate hikes within the year. With the dollar and U.S. Treasury yields rising, gold’s safe-haven appeal has temporarily diminished. Although it has rebounded after a sharp decline, it still faces significant pressure from high interest rates. Its short-term trend heavily depends on the next developments in Middle Eastern tensions.
In the longer term, the worst-case scenario is a complete blockade of the Strait, but this is unlikely because Iran lacks the economic resilience for sustained blockade and faces international countermeasures. The most probable scenario is phased disruptions and selective navigation bans until the U.S.-Israel-Iran conflict de-escalates.
Therefore, the worst outcome has already materialized. For gold prices, the lows have been reached; further declines could present better entry points. Even if oil prices continue to rise, it creates greater momentum for a larger bull market in the future.

Compared to the oil price surges from 2007 to 2008 and 2020 to 2022, which doubled in value, gold has historically entered bull markets afterward. Thus, the current oil rally is setting the stage for a bull market in the second half of this year or next year.
Regarding Federal Reserve monetary policy expectations, recent speeches from multiple officials suggest that while rate hikes are not entirely ruled out, there is a consensus that no hikes will occur this year, and rate cuts are still favored. Some expect four rate cuts by 2026. Given the recent sharp decline in gold prices, this is already pricing in rate hike expectations, and as the cycle shifts toward rate cuts, gold remains bullish.
Therefore, paying attention to current support levels is crucial, as they could be opportunities to prepare for a potential surge past $6,000 in the second half of the year.
On a technical level, the monthly chart shows that gold has been weakening this month, temporarily recovering some of the gains from the previous three months, indicating a potential reversal to a bull trend. However, it has not yet broken below the previous upward trend line support and has rebounded back above it. If the month closes above this line, the outlook favors continued consolidation and subsequent upward movement.

On the weekly chart, after further declines, gold has bottomed and rebounded. If this pattern holds, a return to the $5,000 level is possible.
On the daily chart, gold again formed a bottoming rebound pattern yesterday. The open today continues this momentum, but resistance from multiple moving averages remains. If it reaches these resistance levels, caution is needed for potential pullbacks. A breakout above resistance would turn the outlook bullish and strengthen the rebound.

Gold: support around $4,440 or $4,400; resistance near $4,600 or $4,715;
Silver: support around $70.80 or $68.20; resistance near $74.85 or $77.60;
Note:
Gold TD = (International gold price × exchange rate) / 31.1035
A $1 fluctuation in international gold prices roughly causes a $0.25 change in Gold TD (theoretical).
U.S. futures gold price = London spot price × (1 + gold swap rate × days to expiry / 365)
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Reviewing historical causes and effects, interpreting the current environment, and projecting future trends—adopting bold predictions with cautious trading principles. – Zhang Yaoxi
The above opinions and analyses are solely the author’s personal views, for reference only, not trading advice. Trade at your own risk.
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