Wen Chengkai: The Final Battle for Gold Short Positions Is Imminent - Latest Gold Price Rise and Fall Analysis

April 7, Tuesday, in the early trading session of the Asia market, spot gold continues its “roller-coaster” trend, currently trading around $4,625. As the final deadline draws ever closer, market volatility may further intensify. If the U.S.-Iran conflict escalates again, risk-off sentiment could push gold to break through the $4,700 level; if the situation unexpectedly eases, or the Federal Reserve releases a more hawkish rate-hike signal, gold may test the $4,600 key support again, or even dip to prior lows. Global attention is now focused on Tuesday night’s “ultimate moment” in U.S. Eastern Time—the long-awaited multi-lateral duel between bulls and bears in the gold market is already on the string.

The current gold market has already fallen into a typical bull-bear tug-of-war scenario, with both sides locked in a high degree of stalemate, refusing to yield. On one side are geopolitical conflict and rising inflation; on the other are safe-haven demand and pressure from high interest rates. One side worries about slowing economic growth, while the other faces tightening policy pressure. Multiple opposing forces check and balance each other, keeping gold trapped in a narrow range and unable to form a clear one-way trend.

In the short term, the key variable that will determine the market direction is the result of Trump’s final ultimatum on Tuesday night: if Iran compromises and yields, opens the Strait of Hormuz, oil prices will drop quickly, inflation pressure will ease accordingly, the Fed’s rate-cut room will open up, which is clearly supportive for gold;

But if Iran takes a hardline stance and refuses to compromise, the U.S. further increases its strikes, causing the conflict to escalate, then in the short term safe-haven buying will rush in quickly, pushing gold higher; however, looking at the medium term, inflation expectations will be reinforced again, rate-hike expectations will heat up, which instead will continue to weigh on gold’s upside potential. Gold is currently at an extremely rare critical point of bull-bear equilibrium, with both sides evenly matched; neither side can gain an absolute advantage.

This week has three major key events that will directly determine whether gold can break out of the range-bound pattern:

First, the Federal Reserve meeting minutes for March to be released on Wednesday. The minutes will reveal the Fed’s true stance toward the war and inflation, as well as the internal discussion tendencies regarding the interest-rate path. If the minutes release a strong anti-inflation posture, market rate-hike expectations will rise, and gold will face renewed pressure.

Second, the PCE core inflation data to be released on Thursday. This is the inflation indicator the Federal Reserve values most. If the data stays high, expectations for keeping high interest rates for longer will be further solidified, and gold will continue to be suppressed.

Third, the CPI data to be released on Friday. Institutions generally expect the inflation transmission effects brought about by the war to be concentrated in the CPI. If inflation significantly exceeds expectations, gold will face a double squeeze from rate-hike expectations, and downside risk will increase markedly.

On Monday, offshore gold opened normally. Due to the nonfarm payrolls being a negative surprise, it once dipped to around $4,600, but it did not continue to weaken. Instead, it rebounded in a choppy manner, with the highest touching $4,705. Throughout the day, it repeatedly tugged between the $4,600–$4,705 range, and eventually closed around $4,650, reflecting extremely strong uncertainty and a split between bulls and bears.

Therefore, my thinking is still consistent with yesterday: gold has entered a clear consolidation cycle. Only after major data releases such as the Fed minutes and CPI land, is it possible to break the range and move into a truly one-way market trend. For the medium term, the larger range still looks to be $4,500–$4,800. Before breaking out of that range, there likely won’t be a trend-driven market: if it breaks below $4,500, then watch $4,350 next; if it breaks above $4,800, then look toward $5,000.

Combined with Monday’s volatility rhythm, the range on Tuesday will further narrow. The daily structure remains relatively weak, with pullback risk. Key support below to watch is $4,600, $4,550, and $4,500. On the 4-hour timeframe, an extremely tight range of $4,600–$4,700 is locked in. In terms of trading approach, as mentioned by Shangwen Cheng Kai, do not become overly bearish as long as it does not fall below $4,600, and do not become overly bullish unless it manages to stay above $4,700. Within the range, go long on dips and short on rallies, engage in short-term games, steadily accumulate returns, and wait for key breakout signals before following through with the trend.

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Editor: Chen Ping