Beware of the risk of gold prices falling again

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Source: China Gold Network

On the fundamentals side, the latest data shows that U.S. manufacturing activity in March recorded the largest increase since 2022, indicating a strong rebound in the real economy. However, behind the impressive expansion data, due to escalating geopolitical conflicts, U.S. manufacturing is facing the most severe cost increase pressures in nearly a decade. According to data released by the Institute for Supply Management, the U.S. Manufacturing Purchasing Managers’ Index (PMI) rose to 52.7 in March. The strengthening of output growth and the extension of supplier delivery times jointly pushed up this comprehensive indicator measuring factory activity.

It is worth noting that the extension of delivery times is not solely due to strong demand, but more reflects the severe impact of geopolitical conflicts on the global supply chain. Data shows that the manufacturing price payment index in March surged significantly, reaching the highest level since mid-2022. Over the past two months alone, this index has increased by 19.3 points, marking the largest double-month gain in nearly ten years. The chain reaction of energy and commodity prices is forcing U.S. manufacturers to consider passing costs downstream, indicating that U.S. inflationary pressures may remain high over the next year.

From a technical perspective, gold prices have been oscillating upward since the beginning of this week, breaking through the first resistance at $4,700 per ounce, reaching near $4,800 per ounce before encountering resistance and pulling back. Today during Asian trading hours, international gold prices retraced yesterday’s gains, and the trend remains confined within a bearish model. Investors should be cautious of the risk of gold prices falling again.

On the downside, support is focused around the key level of $4,400 per ounce this week. If international gold prices effectively break below this level, the market may shift from bullish to bearish within the week, with support adjusting to around $4,195 per ounce. On the upside, resistance is first targeted near $4,800 per ounce; if this level is effectively broken, resistance shifts to around $4,903 per ounce.

(The above content does not constitute investment advice or operational guidance. It reflects the author’s personal views and does not represent the stance of this platform.)

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Editor: Zhu Henan