Gold market analysis

"Gold Price at $4,960 Is the Last Line of Defense" 18/3/2026 10:53 Finalized 

The war between the US, Israel and Iran remains deadlocked, with no breakthrough in sight. This has led to the continuation of the inverse relationship between oil prices and gold prices. New York crude oil has temporarily encountered resistance at $100 per barrel, while the spot gold price is hovering around $5,000. If this inverse relationship persists and oil prices rise above $100 per barrel again due to the shortage of crude oil supply from various countries, gold prices should fall even further. However, as Iran has blocked the vital Strait of Hormuz, a major oil shipping route, no oil will flow out even if oil prices soar to $200 per barrel, thus the shortage problem will not be solved. Of course, many countries have reached agreements with Iran to ensure the safe passage of oil tankers through the Strait of Hormuz, and oil-exporting countries can also make a fortune by selling their future crude oil in the futures market. 

Yesterday, the spot gold price plunged to $4,973.92 in the last hour before the London market closed. It then gradually rebounded but failed to close above $5,000 on the hourly chart. As of the early Asian session today, the spot gold price is still hovering around the $5,000 mark. Yesterday's sharp drop seems to be setting the stage for further declines in the coming days. The Federal Reserve will announce its interest rate decision tonight (at 2 a.m. Thursday). It is expected to keep rates unchanged. The market's focus will be on how the current US-Israel-Iran situation will affect US inflation. It is easy to imagine that the Fed must be concerned that persistently high oil prices could push up US inflation. Coupled with the fact that the job market is performing worse than expected, the combination of these factors could push the US into a recession, which in turn would affect global economic performance. This would increase expectations of future rate cuts and a weakening economy would reduce crude oil demand, causing oil prices to fall. 

Therefore, the short-term situation of oil rising and gold falling may persist, but it won't last long. Currently, what investors need to pay attention to is whether the gold price will drop sharply once the Federal Reserve announces that the interest rate remains unchanged tonight, especially whether it can quickly return above 5000 US dollars after breaking through this level, and whether the gold price will close below the 50SMA on the daily chart (currently about 4977) for two consecutive trading days. If so, it will be unfavorable for the gold price. In addition, the SPDR holdings have gradually decreased from 1101.33 tons on March 2nd to 1069.56 tons yesterday, reflecting the continuous pressure on the gold price during the US-Iran-Iraq conflict. The gold price has still not been able to shake off the selling pressure at 5000 US dollars recently, and the possibility of a break within the day has increased. However, 4960 US dollars is still regarded as a strong support level, but the lower limit of the short-term fluctuation range may shift down to 4960 US dollars, while 5060 US dollars remains the main resistance. 

The above content is for reference only and does not constitute investment advice.