XAU Strategy Analysis:

I. Core Viewpoint: The high-level “Doji star” warns of a fierce fight between bulls and bears; short-term fluctuations will not change the bullish long-term backdrop

This week, gold closed the weekly chart with three consecutive bullish candles, but the appearance of long upper shadows shows that when the price surged to around $4,850, it encountered strong profit-taking sell pressure. As the US-Iran situation enters an observation period of a “two-week ceasefire,” risk-aversion sentiment temporarily cools down, and the market’s pricing logic shifts from being “panic-driven” to being driven by “interest-rate expectations.”

Currently, the market displays typical technical correction characteristics at high levels rather than a trend reversal. As long as no effective breakdown of the $4,600 level is seen, any pullback should be treated as a buying-on-dips opportunity.

II. News Analysis: Geopolitical cooling and macro game

· Geopolitics (short-term negative): The US and Iran reached a two-week temporary ceasefire agreement, directly suppressing safe-haven buying in crude oil and gold. The risk premium accumulated from the earlier escalation of conflict is being stripped away, which is the core reason why gold fell back from $4,850.
· US dollar and interest rates (medium-term support): Although the ceasefire boosts risk sentiment, the US Dollar Index weakens at the same time, limiting gold’s downside space. The US inflation data (CPI) and consumer confidence index show signs of stagflation, and market expectations for Fed rate cuts have not been eliminated. Elevated real interest rates remain the biggest obstacle to gold rising, but they are also the cornerstone for a long-term bullish outlook.
· Capital flows (long-term support): Although ETFs have shown a slight outflow, emerging market central banks represented by China’s central bank continue to purchase gold, providing solid “hard support” for gold prices in the $4,600–$4,700 range.

III. Technical Analysis: A converging pattern awaiting a breakout

· Weekly level: The overall trend is strongly bullish. Price is stepping higher steadily supported by the 5-week moving average, and the moving-average system is in a perfect bullish alignment. This week’s rally and pullback is a healthy correction, intended to repair the excessively elevated KDJ indicators.
· Daily level: Entering high-level consolidation. The MACD red histogram contracts with the fast and slow lines sticking together, suggesting that bullish momentum is weakening. The candlestick combination shows a consolidation pattern after a “dark cloud cover” top; in the short term, the trapped positions around $4,850 above need to be digested through sideways movement or a pullback.
· 4-hour level: Short-term bearish-leaning oscillation. Price is under pressure near the middle rail of the Bollinger Bands; the KDJ death cross spreads downward, showing that there is still downward momentum intraday.

IV. Key Support and Resistance Levels

· First support (defense line): $4,680–$4,700
· Reason: This is the low zone of this week’s pullback, and also the lower end of the 4-hour chart’s consolidation; this is where buy orders are the most concentrated.
· Core support (the line dividing bulls and bears): $4,600–$4,650
· Reason: A strong support level on the weekly chart. If this area is lost, the short-term trend will weaken, but from a fundamentals perspective, the probability is low.
· Short-term resistance (the testing stone): $4,780–$4,800
· Reason: This is the daily chart’s top-bottom conversion level, and also the zone where Friday’s rebound faced pressure. Only by holding above it can the uptrend be restarted.
· Bullish target (the ceiling): $4,850
· Reason: The phase high set this week; only if the geopolitical situation worsens again can it break through.

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V. Specific Trading Strategy

Core logic: Given that the larger cycle remains bullish but the smaller cycle is correcting, adopt a range-trading approach of “primarily buying on dips, with secondary selling on rallies.”

Strategy A: Aggressive low-buy (main strategy)

· Entry range: $4,720–$4,730
· Reference basis: The 4-hour top-bottom conversion level and the support zone at Friday’s late session.
· Add-to-position area: near $4,695–$4,700
· Reference basis: Strong support at this week’s pullback low.
· Stop-loss: below $4,680
· Logic: If the real body breaks below the lower boundary of this week’s consolidation range, exit the long positions and stand by.
· Take-profit targets: First target 4800, second target 4850.
· Position recommendation: 2–3% position size (light position to test; if price falls to around 4690, add to reach 5%).

Strategy B: Defensive high-short (auxiliary strategy)

· Trigger condition: If there is a direct rebound to the $4,785–$4,795 area at the start of the week and there is no sudden war news to provide a catalyst.
· Entry point: around $4,790
· Stop-loss: above $4,820
· Take-profit: 4730.
· Position recommendation: 1–2% position size (contrarian small position; strictly use the stop-loss).

VI. Next Week’s Market Outlook

It is expected that gold next week will mainly trade in a range of $4,680–$4,800. At the beginning of next week, it will most likely continue a weak pullback and test the effectiveness of the support below; if it can hold firm above $4,700 during the middle of the week, then the bulls will once again attempt to push toward $4,800. Investors are advised to maintain the rhythm of “buy when it pulls back with confidence, don’t chase when it rallies.”
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