#Gate广场四月发帖挑战 The central bank sells gold reserves to support the exchange rate, and international spot gold liquidity faces tests.

Affected by the Middle East conflict and market expectations that central banks will raise interest rates to combat inflation caused by soaring oil prices, gold prices are currently under pressure. This seems to be an instinctive reaction, similar to the approach taken by various central banks in 2022. Additionally, the market generally believes that the response back then was lagging.

Another unfavorable factor for international spot gold is the decline in gold purchase demand, as well as some countries selling gold reserves to support their currencies, as seen recently in India and Turkey. There may be other countries taking similar actions, but they have not been disclosed yet.

This is a rather shortsighted approach because current fuel prices are impacting consumers, and this impact will eventually spread throughout the economy, necessitating a shift to easing rather than tightening monetary policy. However, we first need to confirm whether central banks agree with this view; for now, they remain focused on inflation.

In the medium-term price target, $4,200 remains a key level. Gold prices falling to this level are still within an upward trend. A break below this level would indicate a reversal of the three-year bullish trend. Conversely, a rebound from this level would keep alive the hope that the gold bull market is not over.

Last week, international spot gold found support around the 200-day moving average when it dropped to $4,100. Strong buying continued until Thursday morning, when prices reached $4,800. Subsequently, Trump’s hawkish comments caused gold prices to retreat but did not trigger a new round of selling, leaving the possibility of a return to a bullish trend.

International spot gold is very likely to test the 50-day moving average near $5,000 again next week and ultimately shake off oversold conditions. This suggests a positive outlook for next week, but we remain cautiously pessimistic about the long-term trend, expecting a mid-term decline to $4,200, with the low point possibly reaching $3,300 in the current bear cycle.

(For reference only, not investment advice)