Gold prices plunged sharply by 2%-2.5% on Monday. As of today’s early Asian session, they have stabilized somewhat, and market sentiment remains cautious.

On Monday (May 4), at the close, spot gold fell 2.02% to $4,523.23 per ounce; New York Comex gold futures dropped 2.53%, closing at $4,526.70 per ounce. During the day, the low touched $4,509.50, and the $4,500 round-number level has become a key support area.

There are three core drivers behind the decline: First, an escalation of geopolitical tensions in the Strait of Hormuz has driven oil prices sharply higher, intensifying inflation concerns and further cooling market expectations for the Federal Reserve to cut interest rates this year, which weakens gold’s appeal as a non-yielding asset. Second, the U.S. Dollar Index has strengthened in tandem amid risk-off sentiment, raising the cost of gold priced in U.S. dollars. Third, the yield on the U.S. 10-year Treasury notes has risen to 4.43%, further increasing the opportunity cost of holding gold.

From a technical perspective, after gold prices broke below the key mainstream support level of $4,541.88, the market entered a bear-dominated pattern. Overseas Chinese Banking Corporation pointed out that $4,510 is a key short-term support; if it is breached, gold may further test $4,452. Overhead resistance is near $4,670. In the short term, the market is focused on this Friday’s U.S. non-farm payroll employment data; if the data comes in stronger than expected, gold may face further downward pressure. #Gate广场五月交易分享