On Thursday (April 17th), after setting a new historical high of $3357.66, spot gold prices experienced a correction, and both long and short sides are engaged in a fierce game. Short term profit taking pressure is evident, but fundamental support still exists, and key support levels will determine the future direction.

Fundamental analysis

Against the backdrop of escalating global trade tensions, Trump unexpectedly held direct negotiations with Japanese officials on tariffs on Wednesday and stated that significant progress had been made. This news slightly improved global risk sentiment and became one of the catalysts for the gold pullback.

In terms of US economic data, data released on Wednesday showed that retail sales in March increased by 1.4%, the largest growth in over two years and better than market expectations of 1.3%. The previously revised data showed a growth of 0.2% in February. This data, combined with Federal Reserve Chairman Powell's statement that he is not inclined to cut interest rates in the near future, provides support for the US dollar.

However, the market remains concerned about the potential economic impact of Trump's aggressive trade policies. The rapid escalation of global trade frictions and concerns about a global recession continue to provide support for the safe haven asset gold. In addition, the market is still preparing for the possibility of the Federal Reserve resuming its interest rate cut cycle in June, which limits further action by dollar bulls and becomes a supporting factor for gold.

Technical analyst interpretation:

The 2-hour chart shows that gold prices have fallen after hitting a historic high of $3357.66 and are currently oscillating above the psychological level of $3300. The MA55 moving average is currently around $3250.39, forming the first important support. On top of this, the price maintains an upward trend intact. The RSI index has fallen from the overbought area to the level of 63.17, releasing some overbought pressure, but still operating within a relatively strong range.

The MACD indicator shows that short-term momentum has weakened, DIFF: 26.79 and DEA: 28.93 form a weak dead cross, indicating an increase in short-term adjustment pressure.

At the daily level, the gold price has maintained a clear upward trend this year, with the MA55 and MA200 moving averages showing an ideal bullish alignment, indicating that the medium-term upward trend remains strong. However, the RSI (14) reached 72.46, entering a more obvious overbought area, indicating an increase in short-term adjustment risk.

The overall technical structure shows that the $3300 mark has become a recent turning point for long and short positions. If it effectively stabilizes, a rebound is expected; If it falls, it may continue to retrace to around the support level of $3250. The historical high of $3357.66 poses strong resistance in the short term.

Market sentiment observation

The current market sentiment is in a typical high-level divergence stage. On the one hand, the record high gold price has triggered a profit taking impulse; On the other hand, the fundamental support provided by geopolitical risks and global trade frictions still gives bulls confidence. The trading volume analysis shows that the callback is accompanied by relatively mild trading volume, suggesting that this may be a healthy adjustment rather than a trend reversal.

From the perspective of behavioral finance, the market shows a clear anchoring effect near the psychological integer level of $3300, with significant differentiation in market expectations and a slight bias towards caution in sentiment indicators. The short-term improvement in risk sentiment has led some funds to shift from safe haven assets to risky assets, but whether this shift can be sustained remains to be seen.

Future prospects

Short term outlook: Gold prices may fluctuate and consolidate within the range of $3250-3350, releasing overbought pressure on technical indicators. The key support level is around the MA55 moving average at $3250 and the previous high at $3300. If the US dollar strengthens or risk sentiment improves further, gold prices may test the level of $3200; If geopolitical risks escalate again, it is expected to challenge the historical high of $3357.66 again.

Medium - to long-term outlook: Despite short-term adjustments, the medium - to long-term upward trend of gold remains intact. Global trade frictions, expectations of monetary easing, and central bank demand for gold continue to provide strong support for gold prices. As pointed out by ANZ analysts, even with a pullback towards $3050, the overall bullish outlook remains unchanged. The gold price has risen by over 2% so far this week and is expected to record a weekly increase, which also supports the integrity of the medium-term upward channel.