Holiday Thinned Trading Conditions
Several Asian and European markets are closed for the Easter Monday holiday. Trading activity is expected to pick up again in the American session. West Texas Intermediate (WTI) was near $106 per barrel, its highest level in over a month. The near-term technical view for XAU/USD is bearish. On the 4-hour chart, price slipped below the rising 20-period SMA near $4,663. It also remains below the 100- and 200-period SMAs at $4,700 and $4,900. Momentum is below its midline, and RSI has moved back towards 50 from overbought levels. Support is at $4,600, then $4,560, while resistance is at $4,663, $4,680, and $4,785.Potential Rebound Levels
A move above $4,680–$4,785 would reduce downside pressure and bring the $4,700 area back into view. The technical analysis section was produced with help from an AI tool. With geopolitical tensions flaring between the US and Iran over the Strait of Hormuz, we are seeing classic risk-off behavior in the markets. The immediate pressure on gold, despite its safe-haven status, is likely due to a surging US dollar, as capital seeks the world’s primary reserve currency. Traders should therefore expect continued dollar strength to act as a headwind for the precious metal this week. Volatility is the most direct trade in this environment, and we should be positioning for wider price swings in the coming weeks. Options premiums on gold futures and ETFs have already expanded, with implied volatility on gold surging over 30% in overnight trading, a level not seen since the banking turmoil of 2025. Buying straddles or strangles on the SPDR Gold Shares (GLD) ETF could be an effective strategy to profit from large price movements in either direction. For those with a bearish short-term bias, the technical breakdown below $4,663 opens the door for further declines toward the $4,560 support level. We would consider buying put options with near-term expiries or establishing bear put spreads to limit risk. The high price of WTI crude oil at $106 a barrel will complicate the picture, potentially stoking inflation fears that could later become supportive for gold. Looking back at the market’s reaction to the start of the conflict in Ukraine in 2022, we saw gold initially spike over 7% in less than three weeks before pulling back. Should the current situation escalate from threats to direct military action, this dip could represent a significant buying opportunity for medium-term call options. The key is to wait for confirmation that the conflict is widening beyond diplomatic threats. The macroeconomic backdrop remains complex, further clouding gold’s path. The latest Consumer Price Index reading for March 2026 came in at a stubborn 3.5%, keeping pressure on the Federal Reserve to maintain its restrictive policy stance. This fundamental tension between geopolitical safe-haven demand and a strong, high-interest-rate dollar is what is creating the current choppy price action. Data from last week showed that managed money accounts were already holding significant net-long positions in gold futures, making the market vulnerable to a long squeeze on negative news. This suggests the current drop is partly technical, as crowded trades are unwound in a panic. We will be watching for signs that this positioning has been flushed out before considering new long-term bullish positions. Create your live VT Markets account and start trading now.
Start trading now – Click here to create your real VT Markets account
