Trump Continues to Strain US-Iran Situation and US March Retail Data Exceeds Expectations, Will Gold Rise or Fall This Week?

The most critical fundamental factor currently affecting gold remains the uncertainty of the situation in the Middle East. Trump's stance on the ceasefire issue has been unstable; the market sees potential extensions of the ceasefire and continued negotiations on one hand, while fearing a reversal at any moment on the other. This volatility has kept oil prices highly sensitive recently. As long as the Strait of Hormuz and related energy transport routes remain in an uncertain environment, it will be difficult for crude oil to stabilize. Once oil prices are driven higher, U.S. inflation expectations will heat up again, subsequently affecting gold trends.

On April 21, Trump sent a more hawkish signal when discussing the U.S.-Iran ceasefire, clearly stating that he does not want to extend the ceasefire and claiming that if negotiations collapse, the U.S. military is ready for action.

Following the news, geopolitical expectations that had slightly eased were pulled back into conflict trading, with Brent crude intraday gains once exceeding $5, WTI crude oil performed even more strongly, with intraday gains approaching $7 at one point, hitting a high of $92.23; meanwhile, gold fell in response, with an intraday drop exceeding $100, briefly breaking below the 4,700 mark and reaching a low of $4,668.52.

Later that same day, Trump reversed his stance, stating that the ceasefire would be extended until a result was reached in the U.S.-Iran negotiations. This statement caused oil prices, which had risen due to ceasefire uncertainty, to weaken rapidly. As of press time, WTI crude had retreated to near $89.30, and Brent crude had also fallen back to around $93.60; simultaneously, gold quickly rebounded to near $4,760, with a rally of nearly $100.

From the perspective of market trading logic, the market is currently not trading on the safe-haven properties brought by geopolitical risks, but rather on whether oil prices will continue to run at high levels. As long as oil prices remain elevated, it will be difficult for U.S. inflation to decline significantly; if inflation does not fall, it will be even harder for the Federal Reserve to pivot quickly toward easing. The judgments of analysts at some institutions are also consistent: as long as the Fed does not turn significantly hawkish to the point of raising interest rates again, gold is unlikely to see a sustained plunge. However, if high interest rates are maintained for longer, the upside potential for gold prices will be compressed.

The latest U.S. retail sales data for March far exceeded expectations, rising 1.7% month-over-month to surpass the anticipated 1.4% and marking the largest monthly gain in nearly a year.

Notably, the data was not uniformly strong across the board but was significantly bolstered by gasoline station receipts. While core retail sales and the GDP-related control group also grew, there was a pronounced divergence among categories: autos, furniture, electronics, and online retail performed well, while discretionary spending such as dining and apparel was weak. This composition suggests that American consumers have not suddenly lost their purchasing power, but spending behavior is becoming more sensitive to oil prices, tax refunds, and savings, implying that sustained high oil prices could weigh on future consumption.

For gold, the retail data indicates that the U.S. economy has yet to cool significantly. As long as consumer resilience remains, it will be harder for the Federal Reserve to pivot quickly toward easing; meanwhile, as long as the market believes high interest rates will persist, gold will continue to face opportunity cost pressures. Fed officials have recently begun factoring in war-driven energy costs and sticky inflation, with some institutions even establishing a 'no rate cuts this year' scenario as their base case.

Gold Daily Chart, Source: TradingView

According to the gold daily chart, gold broke below the $4,760 support level yesterday, opening room for a deeper correction. Prices dropped to as low as $4,668.52 before rebounding toward $4,760, fueled by President Trump’s remarks on maintaining a ceasefire. Although the rebound was strong, Trump’s vacillation regarding the U.S.-Iran situation has left the market filled with uncertainty.

Gold 4-Hour Chart, Source: TradingView

From the 4-hour chart, although gold pulled back significantly yesterday, it staged a rapid rebound upon touching the MA144, indicating strong support near that level. Additionally, gold formed a highly confirming reversal candlestick pattern—a Hammer—at this position, suggesting that short-term bearish momentum is exhausted and bullish forces are regaining the upper hand.

To the upside, attention should first be paid to the 50% Fibonacci retracement level at $4,760. If gold can decisively break and hold above this level, it will reopen the upside toward the $4,870 resistance level, with the $5,000 psychological mark further up.

To the downside, focus is needed on whether gold will continue to fall and break below $4,668.52. If this level is breached, gold will further test the gap low of $4,644.34 formed last Monday, with $4,600 being the next level down.

Support Levels: 4,668.52, 4,600.00

Resistance Levels: 4,760.00, 4,870.00

This content was translated using AI and reviewed for clarity. It is for informational purposes only.