Gold price rises on dip buying after hitting a one-week low

FX168 Finance News, April 23—— On Wednesday (April 22) during the US trading session, the price of gold rose, quoted at $4,736.35/oz, an increase of 0.35%. Previously, it had fallen to the lowest point in more than a week during the previous trading session, prompting investors to buy the dip while waiting for the possible resumption of peace talks between the US and Iran.

On Wednesday (April 22) during the US session, gold prices rose, quoted at $4,736.35/oz, up 0.35%. Previously, it had dropped to a one-week low in the prior trading session, prompting investors to buy the dip and wait for a possible resumption in US-Iran peace talks.



The yield on US Treasury bonds fell in the middle of the week. After yields fell on Tuesday, investors rushed to buy precious metals, which was quite evident in both the gold and silver markets. However, when the US 10-year Treasury yield pulled back to 4.298%, gold lost its earlier gains. Meanwhile, the US dollar rebounded. The US dollar index rose 0.17% to 98.57, reaching a seven-day high.

High oil prices are the main reason why gold prices can't continue to rise. As inflationary pressures intensify, the Federal Reserve is more likely to keep high interest rates for a long time. The money market expects the Fed to hold rates steady until 2026, while speculators anticipate the first rate cut in July 2027.

In terms of geopolitics, US blockades on ships flying the Iranian flag have stalled US-Iran talks. In response, Tehran is escalating tensions: the Islamic Revolutionary Guard Corps has seized three cargo ships in the Strait of Hormuz, demanding the US lift the blockade. US President Donald Trump decided to extend the ceasefire while waiting for a proposal from Tehran. There are reports of internal disagreements among Iran's leadership. Due to Israeli drone strikes in Lebanon that left at least three people dead, the ceasefire agreement between Israel and Lebanon is also under pressure.

After Trump's statement, hopes have increased for a resolution to the Strait of Hormuz issue, making gold prices tick up slightly. However, Bart Melek, Global Head of Commodity Strategy at TD Securities, said the situation remains extremely volatile and filled with uncertainty.

Before the release of US economic data, jobless claims and S&P Global’s PMI for April will be released on Thursday.

(Spot Gold Daily Chart, Source: Yihuitong)

Gold prices remain stable, failing to break above the $4,800 psychological level. This has triggered further declines, pushing the price below the $4,750 mark. Next, gold may challenge the 100-day Simple Moving Average (SMA) at $4,718 (UTC+8).

It is worth noting that since hitting the monthly high of $4,890, this yellow metal has posted consecutive lower highs and lower lows for three days, turning market sentiment from neutral to bearish. Sellers are expecting the 100-day and 20-day SMA to be breached. The 20-day SMA is currently at $4,692 (UTC+8), already below the $4,700 psychological level.

Below this level, the next significant support stands at $4,600 (UTC+8).

For an upward trend to materialize, the price of gold must climb back above the $4,800 mark. Only then can investors remain hopeful for further upside. The next major resistance is the 50-day SMA at $4,883 (UTC+8).