Jiang Muyang: Gold Price Trend Analysis and Rebound Recovery After Sharp Decline; Silver Trading Recommendations

International Gold:

On March 20th, Thursday (March 19th), spot gold prices plummeted by 3.5%, closing at $4,650 per ounce. During the session, it once dropped over 6%, hitting the lowest point since early February at $4,503.18/oz. April US gold futures also fell sharply by 5.9%, finally closing at $4,605.70. This marks the seventh consecutive day of decline in gold prices. Once favored by institutional investors as a safe haven and inflation hedge, gold now seems tightly locked by high interest rates, with a strong downward momentum causing many long investors to feel anxious. Recently, major negative news has directly increased the cost of holding gold, triggering large-scale withdrawals from gold ETFs. There are no significant economic data releases during the Asian and European trading sessions today, and the market is in a phase of digesting negative factors. Risk aversion sentiment has cooled, and selling pressure has significantly weakened. With no new major negative news in the short term, gold prices are unlikely to continue the sharp decline seen in previous days. The main trend is expected to be narrow-range oscillation and weak recovery, focusing on market sentiment after the European session opens, while remaining alert to small fluctuations caused by early positioning ahead of the US session.

From a wave structure perspective, this round of gold price correction started from a high of 5597 with a standard ABC three-wave adjustment: earlier, 5598-4402 completed wave A with a sharp decline; 4402-5419 completed wave B with a weak rebound. Currently, the decline belongs to the main downward phase of wave C, which is subdivided into five smaller waves, with clear and traceable wave patterns. Wave C-1 declined from 5419 to 4996, wave C-2 rebounded weakly from 4996 to 5238, and wave C-3, the largest and most energetic decline, fell from 5238 to 4502. After significant drops over the past two days, the momentum of wave C-3 has been exhausted. On Thursday, prices bottomed out and then rebounded, closing with a long lower shadow. Volume shifted from heavy selling to consolidation, confirming that the market has officially transitioned into the C-4 correction phase, mainly driven by rebounds during the Asian and European sessions, not a trend reversal.

According to wave theory and retracement ratios, wave C-4 is a consolidation rebound with limited upside and a predominantly oscillatory trend. It will not surpass the high of wave C-2 at 5238, and typically, a retracement of 38.2%-50% of wave C-3’s decline will serve as resistance and mark the end of the correction. Once wave C-4 completes its rebound, the market will likely enter the final wave C-5 to test the lows, probably probing previous support zones to complete the entire ABC correction wave, before conditions for stabilization and reversal are met. During the Asian and European sessions, focus on the strength and resistance of wave C-4’s rebound, and avoid mistaking this correction wave for a trend reversal or chasing highs.

In terms of short-term technical indicators, the daily RSI and KDJ are both in oversold territory, indicating a strong technical correction is needed. On the hourly chart, gold prices have stabilized above short-term moving averages, with a slight improvement in the bearish moving average alignment, but the 5-day and 10-day moving averages still show a death cross, limiting rebound potential. Key support levels are at $4,570-$4,502, which are the two recent lows during Thursday’s dip. Breaking below $4,502 could open further downside space. The main resistance is at $4,700-$4,728, which corresponds to the 0.5-0.618 Fibonacci retracement levels and is a critical threshold for Asian and European session rebounds. Overall, intra-day Asian and European gold prices are expected to fluctuate within a narrow range, mainly consolidating at lower levels. During the Asian session, prices may rebound mildly from support at $4,640; if resistance at $4,700 is encountered during the European session, a pullback and sideways movement are likely, forming a pattern of initial rise followed by correction, with no clear trend. This environment is suitable for short-term high sell and low buy strategies.

Gold Trading Suggestions:

1. Long Position Strategy: Enter on stabilization around $4,660-$4,650, with a stop loss at $4,635, targeting $4,700-$4,730.

2. Short Position Strategy: Enter on resistance during rebound at $4,700-$4,728, with a manual stop loss, targeting $4,650-$4,630-$4,600.

International Silver:

This week, international silver experienced an epic plunge, pressured by the Fed’s hawkish rate cut expectations, the strengthening dollar and US Treasury yields, along with a collective flight from precious metals. Silver prices repeatedly broke through key support levels, with a low of $65.5 during Thursday’s session. However, by the close, prices sharply rebounded, significantly narrowing the decline. On Friday during the Asian and European sessions, the market entered an oversold correction window.

Technically, after bottoming at $65.5 on Thursday, silver rebounded strongly, forming a long lower shadow and closing with a violent rally near $74. Volume shifted from heavy selling to consolidation, confirming the short-term bearish momentum has been exhausted, and bottom-fishing funds are entering to push prices higher. On the daily chart, RSI and KDJ are both in deep oversold zones, indicating a strong technical correction is needed. On the hourly chart, prices have stabilized above short-term moving averages, with initial recovery of the bearish alignment, and rebound momentum gradually building, though medium-term moving averages still exert resistance, caution is advised against rushing for high. Key support levels are at $69.0-$70.0, which are the recent breakout support zones and the core area for stabilization during Asian and European sessions. The main resistance is at $76.0-$77.0, a zone of previous high trading volume and psychological resistance, also a key threshold for Asian and European rebounds. Overall, silver is in an oversold correction phase, with short-term strength oscillating, and traders should avoid blindly chasing high.

During Friday’s Asian and European sessions, silver shows a relatively strong oscillation, testing higher levels. Currently, prices stay above $74, supported by $70, with continued inflow of bottom-fishing funds. If resistance at $77 is encountered during the European session, a pullback and sideways movement are likely, maintaining a generally strong tug-of-war pattern. Silver remains volatile, so trading should favor buying on dips and cautious shorting.

Silver Trading Strategies:

1. Long Position: Enter on stabilization around $72.5-$73.3, with a stop loss at $71.9, targeting $75.5-$76.5, with potential to break resistance at $77.0, taking profits in stages.

2. Short Position: Enter on resistance at $76.5-$77.0, with a stop loss at $78.0, targeting $74.0-$72.0-$71.0. Do not blindly short; trade quickly and exit promptly.