Zhang Yaoxi: The U.S. side is expected to suspend the ceasefire for one month, and the rebound in gold prices has increased bullish expectations

Zhang Yaoxi: The U.S. plans to declare a one-month ceasefire, and gold prices rebound from the bottom, increasing bullish expectations
On the trading day Tuesday (March 24): International gold prices rebounded after hitting the bottom, closing higher, as media reported that the U.S. intends to set a one-month ceasefire. The price of gold rose sharply in the last hours of trading. It consistently closed above the 144-day moving average and maintained a long lower shadow vertical line that indicates a bullish reversal, suggesting that this round of decline has obviously reached a bottom, with the market set for a rebound, awaiting targets of $4,700 or $5,100.
In terms of specific trends, the gold price opened at $4,412.83 per ounce in the Asian market, initially falling to an intraday low of $4,305.98 at around 10 a.m., after which it maintained a fluctuating rebound, and at around 4 a.m. the next day, it quickly surged past intraday resistance and the daily opening price, recording an intraday high of $4,484.03, ultimately stabilizing at $4,474.34, with a daily range of $178.05, closing up $61.51, a rise of 1.39%.
Looking ahead to today, Wednesday (March 25): International gold opened stronger, continuing the recovery momentum from the overnight close. The U.S. dollar index and crude oil trends were weak in the early session, providing some support. Additionally, due to mediation from Turkey, Egypt, and Pakistan, which is 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, which also shifts the geopolitical risk landscape, driving up gold prices.

However, the current factors are merely expectations, and before substantial negotiation results are produced, the rebound in gold prices is expected to be limited and may enter a phase of bottoming and oscillation.
Recently, the blockade in the Strait of Hormuz has pushed oil prices higher, reigniting inflation concerns and causing the market to shift its expectations for the Federal Reserve from rate cuts to possible rate hikes within the year. With both the dollar and U.S. Treasury yields rising, gold’s safe-haven function has temporarily faltered. Although there has been a rebound after a significant drop, it still faces considerable pressure from the high-interest-rate environment, and short-term movements are highly dependent on the next developments in the Middle East situation.
However, as time extends, the worst-case scenario would be a complete blockade of the strait, but this likelihood is low, as Iran lacks the economic capacity for a prolonged blockade and faces international countermeasures. Therefore, the most likely outcome is periodic disruptions and selective navigation bans until U.S.-Israeli-Iranian tensions de-escalate.
Thus, it can be said that the worst outcome has already occurred; for gold prices, a lower bottom has already emerged. Even if further declines occur, it presents better entry opportunities, and even if oil prices continue to rise, it is creating a larger supportive environment for a greater bull market in the future.

Comparing the doubling oil price rallies from 2020 to 2022 and from July 2007 to August 2008, gold prices subsequently entered bull markets. Therefore, the current rise in oil prices is also creating opportunities for a bull market in the second half of this year or next year.
Regarding the Federal Reserve’s monetary policy expectations, recent statements from numerous officials indicate that while they do not rule out the possibility of rate hikes, there is a consensus that there will be no rate hikes this year, and they still advocate for rate cuts this year, with predictions of four rate cuts in 2026. Thus, in the current context of significant declines in gold prices, expectations for rate hikes are being consumed, and gold prices still have a bullish outlook while remaining in a rate-cutting cycle. Therefore, paying attention to the current lower price levels is crucial, as it represents a preparation opportunity for a potential challenge of the $6,000 mark or higher in the second half of the year.
Technically, on a monthly chart, gold prices have shown continued weakness this month, recovering some of the gains from the previous three months, indicating a tendency to reverse the bull market. However, it has not yet substantially broken below the previous uptrend line support and has rebounded back above it. If this month closes above this level, the market is likely to experience sustained oscillation adjustments, and thereafter, a renewed upward climb.

On a weekly chart, after further declines, gold prices have rebounded off the bottom. If this week’s closing maintains this pattern, the market can expect a rebound back to the $5,000 mark.
On a daily chart, gold prices once again formed a bottom-reversal bullish pattern yesterday, and today’s opening continued this expectation of strength. However, there are still numerous moving average resistances above. If the rebound reaches these resistances, attention should be paid to the risk of encountering resistance and falling back. A breakthrough in resistance would turn the outlook bullish with increased rebound strength.

Gold: Watch for support around $4,440 or $4,400; resistance around $4,600 or $4,715;
Silver: Watch for support around $70.80 or $68.20; resistance around $74.85 or $77.60;
Note:
Gold TD = (International gold price x exchange rate) / 31.1035
International gold fluctuates by $1, gold TD fluctuates by about 0.25 Yuan (theoretically).
U.S. futures gold price = London spot price × (1 + gold swap rate × days to futures expiration / 365)
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Review historical causes, interpret the current environment, and look ahead to future trends, adhering to the principle of bold predictions and cautious trading. – Zhang Yaoxi
The above views and analyses represent the author’s personal thoughts and are for reference only. They do not constitute trading advice. Trading based on them is at your own risk.
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