Week of April 7-11, 2025
This report provides a comprehensive analysis of gold trading during the week of March 31 - April 4, 2025, along with trading recommendations for the upcoming week. Gold prices experienced a downward trend last week, declining by 1.13% from $3,091.00 to $3,056.10.
Technical indicators suggest the metal is currently in oversold territory, with an RSI of 19.32 and bearish MACD signals. However, fundamental factors present a mixed picture, with declining Treasury yields and US Dollar weakness potentially supporting gold prices, while significant equity market weakness (-9.58% in the S&P 500) creates a complex trading environment.
Based on our analysis, we see potential for a technical rebound in the coming week, though traders should remain cautious and implement appropriate risk management strategies given the mixed signals in the market.
-1.13%
19.32
OVERSOLD
-6.2464
BEARISH
$3,032.70
Opening price
$3,091.00
Closing price
$3,056.10
Weekly high
$3,168.60
Weekly low
$3,032.70
Weekly change
-$34.90 (-1.13%)
| Date | Close Price | Change | % Change |
|---|---|---|---|
| April 1, 2025 | $3,118.90 | -$3.90 | -0.12% |
| April 2, 2025 | $3,139.90 | +$21.00 | +0.67% |
| April 3, 2025 | $3,097.00 | -$42.90 | -1.37% |
| April 4, 2025 | $3,056.10 | -$40.90 | -1.32% |
The price action shows initial stability followed by accelerating downward momentum in the latter part of the week, with consecutive significant daily losses on Thursday and Friday.
The technical picture for gold is currently bearish in the short term, with prices closing near the weekly lows. However, several indicators suggest the potential for a technical bounce:
The MACD remains bearish with the MACD line below the signal line, indicating ongoing downward momentum despite the oversold conditions.
The US Dollar Index (DXY) showed weakness last week, which typically supports gold prices as gold becomes less expensive for holders of other currencies. This factor is potentially bullish for gold in the coming week.
10-Year Treasury Yield decreased significantly from 4.25% to 3.98% last week (-0.26 percentage points). Lower yields decrease the opportunity cost of holding non-yielding assets like gold, creating a supportive environment for gold prices.
Inflation remains above the Federal Reserve's 2% target, with core inflation measures showing signs of persistence. As gold is traditionally viewed as an inflation hedge, ongoing inflation concerns provide underlying support for gold prices.
The Federal Reserve maintains a restrictive monetary policy stance but market participants are watching for signals about potential interest rate cuts later in the year. Central banks globally have continued to add gold to their reserves, providing underlying support for gold prices.
Ongoing conflicts in various regions have maintained a geopolitical risk premium in gold prices, while trade tensions and political uncertainties have contributed to market volatility.
The S&P 500 experienced a significant decline of 9.58% last week. This equity weakness typically increases safe-haven demand for gold, although the relationship is not always consistent.
The interplay of these factors creates a market environment where gold appears technically oversold in the short term, while several fundamental factors provide potential support for a recovery.
Gold is currently in a technically oversold condition after a week of downward price movement, with the RSI at 19.32 indicating potential for a technical rebound. However, this occurs within a complex fundamental environment with mixed signals: supportive factors (US Dollar weakness, declining Treasury yields, equity market volatility) balanced against bearish momentum and seasonal considerations.
Consider phased buying on dips toward the strong support level at $3,032.70.
Allocate no more than 20-25% of intended gold investment at current levels.
Place protective stops at $2,995 (approximately 1% below the strong support level).
Initial target at $3,097 (previous support now resistance), with potential extension to $3,122.80.
Maintain a risk-reward ratio of at least 1:2 for any new positions.
The deeply oversold RSI combined with proximity to strong support levels provides a reasonable entry opportunity for conservative investors looking to build long-term gold positions. The phased approach limits downside exposure while allowing participation in potential rebounds.
Look for intraday signs of reversal (bullish candlestick patterns, positive divergences) to enter long positions between $3,032-$3,060.
Allocate 40-50% of intended gold trading capital.
Tight stops at $3,020 (below strong support).
Consider scaling out at each target level (30%/30%/40% of position).
The combination of oversold technical conditions and supportive fundamental factors (declining yields, dollar weakness) creates a potential counter-trend trading opportunity. The multi-target approach allows for profit-taking while maintaining exposure to a potentially larger move.
Aggressive traders can exploit the current technical setup through multiple approaches, either playing the potential rebound from oversold conditions or positioning for a decisive breakout from the current range.
Sudden strengthening of the USD would likely pressure gold prices.
Any hawkish signals could negatively impact gold.
Rising yields would increase the opportunity cost of holding gold.
Reduced volatility in stock markets might diminish safe-haven demand.
A decisive break below $3,032 could accelerate selling pressure.
These recommendations are based on analysis of historical data and current market conditions. All trading involves risk, and past performance is not indicative of future results. Traders and investors should use these recommendations as part of a comprehensive trading plan that includes proper risk management and position sizing appropriate to individual risk tolerance and investment objectives.