After digesting the discussions between the Chinese and US leaders regarding the situation in Iran and the Strait of Hormuz crisis, market participants did not immediately increase their hopes for a full reopening of the Strait of Hormuz. Consequently, US crude oil prices did not show a significant decline, and investors’ expectations that the Federal Reserve might raise interest rates in June to curb inflation have not subsided. Conversely, if the Fed has no room for rate cuts this year, it is already a de facto rate hike. Therefore, influenced by the outlook for interest rate movements, investors are unlikely to have a strong desire to buy gold in the short term, and gold prices may fall below the $4,600 level in the short term.

On the other hand, investors continue to focus on the Israeli attack on Lebanon, and the escalating anxiety surrounding it continues for some time. The instability in the Middle East shows no signs of abating, which encourages investors to cash out in the gold market to avoid related risks, further weighing on gold prices.

A short position can be established around $4,703, with a short-term target of $4,596 for profit-taking and a stop-loss at $4,723.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com