According to Reuters, gold prices extended their rally in Wednesday's session, as the market re-evaluated short-term risks after US President Donald Trump said he had agreed to temporarily suspend bombings and attacks on Iran for two weeks, thereby easing concerns about inflation due to rising energy prices.
Mr. Trump said Washington has agreed to suspend attacks for two weeks and has received a 10-point proposal from Iran, which he described as a feasible basis for negotiations.
This is an immediate reactionary increase due to the market's relief, and it is still necessary to wait and see if Iran complies. For gold, the 200-day moving average at 4,930 USD/ounce, followed by the 5,000 USD/ounce mark, will be important resistance levels. Similarly, the 80-81 USD/ounce zone is a noteworthy level for silver" - independent metal trader Tai Wong said.
Pakistan, which is mediating between Washington and Tehran, has proposed extending it for two more weeks to facilitate further diplomacy.
The Iranian Supreme Security Council said negotiations with the US will begin on Friday, April 10, in Islamabad, after the country sent a proposal through Pakistan. However, the agency also emphasized that negotiations do not mean the end of the war.
Rising energy prices can push inflation up and further complicate interest rate cuts by central banks. Although gold is often seen as an inflation hedging tool and a safe haven asset during times of instability, the attractiveness of this precious metal often declines in a high interest rate environment because gold does not yield yields.
According to research by the Federal Reserve Bank of Dallas, if global oil trade is disrupted for a long time, inflation in the US may exceed 4% by the end of the year, and may even increase more sharply in the short term.
Currently, the market is waiting for the minutes of the March meeting of the US Federal Reserve (Fed), expected to be released on Wednesday.
Technically, Jim Wyckoff - senior analyst at Kitco said that the next price increase target of buyers on the gold futures market after June is to bring the closing price above the strong resistance level of 5,000 USD/ounce.
In the opposite direction, the nearest downside target of the selling side is to pull the futures contract price below the important technical support level of 4,300 USD/ounce.
The first resistance level was determined at 4,750 USD/ounce, followed by the peak of last week at 4,825.90 USD/ounce.
Meanwhile, the first support level is at the bottom of this week at 4.626.20 USD/ounce, followed by the 4.580.4 USD/ounce mark.
The Wyckoff index at 5.0 shows that the gold market is currently in a neutral state, with relatively balanced buying and selling forces.
On the market for other precious metals, spot silver prices rose 4.3% to $76.08/ounce, platinum rose 2.4% to $2,004.95/ounce and palladium rose 2.1% to $1,500/ounce.
