Gong Guanming: Gold V-Shaped Reversal Coming, Crude Oil Beware of Adjustment on Friday

————————News Summary

On March 20th, Friday, gold rebounded, currently quoted around 4720. Despite the fierce short-term decline, the long-term bullish logic of gold has not completely collapsed. Geopolitical risks remain, with conflicts in the Middle East potentially escalating at any time; the devaluation pressure on the global monetary system also persists. As long as oil prices stabilize, or central banks are forced to adopt easing policies by 2026, gold may regain its upward momentum. The key support levels are still clearly visible; although there is room for a pullback, it also provides a potential low-entry window for rational investors. Of course, risks should not be ignored: if the Iran conflict continues to escalate, pushing oil prices higher, and if hawkish central bank stances strengthen further, gold could remain under pressure. Investors should closely monitor crude oil trends, Federal Reserve statements, and inflation data changes.

Crude oil prices are volatile and declining, currently quoted at 94.4. U.S. crude oil inventories have unexpectedly increased, indicating weaker demand; Iran has paused attacks on energy infrastructure, slightly easing tensions in the Middle East; the U.S. has issued permits to relax sanctions on Russian oil and is considering lifting sanctions on offshore Iranian oil, causing oil prices to fluctuate significantly.

————————Gold Trend Analysis and Strategy

Gold fell further yesterday, ending with a long lower shadow candlestick, indicating that gold has touched a support level. Notably, gold closed above the weekly middle band yesterday, suggesting that the support around 4617 on the weekly middle band remains effective. Gold may rebound based on the weekly middle band.

On the four-hour chart, gold rebounded after a dip. If no new lows are made today, a V-shaped reversal could form. The potential short-term bottom for gold might be around 4502. The main resistance above is near the middle band at 4853. Breaking this level could trigger a new rally; otherwise, gold may oscillate at low levels. Our current approach is to look for opportunities to buy on dips, with a focus on the short-term moving average around 4665.

————————Oil Trend Analysis and Strategy

Crude oil surged yesterday but closed lower, remaining above the 10-day moving average, though the upward momentum is weakening. The 5-day moving average has also started to turn downward. If the conflict does not escalate, a correction is likely, with support around the daily middle band at 83.

On the four-hour chart, Bollinger Bands are flat, and crude oil shows a sideways trend. Although there are no signs of a breakdown in the short term, the upward momentum on the daily chart is weakening. Therefore, it is not recommended to buy at the lower end of the current range today, but waiting for a breakout at the top of the range to short may also be unrealistic. It is advisable to wait for the market to develop further before entering. If a correction occurs, look for support around the daily middle band at 83 to go long and expect a rally.

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Editor: Chen Ping