Gold prices in April may fluctuate and consolidate, watch for the opportunity of a second bottom test

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Source: Xinhua Finance

Xinhua Finance Beijing, April 2 — In March, international gold prices experienced a rollercoaster, with a total fluctuation of $1,321.07 throughout the month, a monthly decline of $609.13, or 11.54%. The monthly candlestick shows a long lower shadow with a long bearish body. Notably, the gold price’s monthly volatility exceeding $1,000 is rare in recent years, indicating that investor sentiment is rapidly shifting between extreme greed and fear. However, the sharp fluctuations in gold prices have initially bottomed out in the short term, though the short-term trend remains weak. It is expected that gold prices will continue to consolidate and fluctuate in April, with opportunities for a second bottom.

Fundamentally, the ongoing escalation of the US-Israel conflict should be bullish for gold, but tensions in the Middle East have caused oil prices to surge sharply, increasing the risk of global stagflation. Deeper reasons lie in the fact that the US-Israel conflict is not a sudden “black swan” event; the market had already priced in risk premiums at the beginning of the year. When the conflict escalated, funds adopted a “buy the expectation, sell the reality” strategy of concentrated selling. Additionally, global stock markets declined, and gold was sold off to replenish short-term liquidity, becoming a primary market mechanism.

Meanwhile, the Federal Reserve signaled a hawkish stance at the March policy meeting: the Fed kept interest rates unchanged as expected, but the dot plot showed only one rate cut expected in 2026 (by 25 basis points), with the first cut delayed to September, and the full-year PCE inflation forecast raised to 2.7%. This contrasts sharply with market expectations at the start of the year of three to five rate cuts, and the expected rate cut magnitude has also sharply narrowed. The market has even begun to price in about a 10% chance of rate hikes, well above usual expectations. During the same period, the US dollar index continued to rise and broke through the 100 mark, further pressuring gold prices.

Additionally, global central banks’ gold purchases have been a key support for the gold bull market in recent years, but this support weakened in March. Data shows that in 2025, global central bank net gold purchases reached 863 tons, a record high. However, in January 2026, global central bank net gold purchases were only about 5 tons, far below the monthly average of 27 tons in 2025, indicating a clear slowdown in gold buying. The Turkish and Russian central banks have recently been the main sellers of gold.

In terms of ETFs, since mid-March, global gold ETFs have experienced significant net redemptions, with short-term capital outflows increasing selling pressure on gold.

Overall, the sharp adjustment in gold prices in March was a phase of correction driven by multiple factors such as the Fed turning hawkish, geopolitical risks, and liquidity squeezes, rather than the end of a bull market. On the international financial front, long-term positive factors such as concerns over US dollar credit, normalization of geopolitical risks, US debt issues, and de-dollarization remain. This decline is more about a phase of market pricing restructuring, with gold evolving from a traditional “safe-haven asset” to a “composite asset” with both hedging and risk attributes.

Technically, over the past decade, gold prices have risen in April seven times and fallen three times, with an approximately 70% probability of an increase. After the sharp fluctuations and initial bottoming in March, the probability of gold prices rising in April remains relatively high.

Based on current gold price trends and the extreme volatility described above, preliminary estimates suggest that the first resistance level within the month is still around $4,800. In April, the main trading range for gold is expected to stay between $4,570 and $4,990, with the optimistic target of reaching the $5,000 mark within the month.

In summary, the March correction in gold prices is a deep correction within a long-term upward trend, not a trend reversal. The logic chain of “rising oil prices → rising inflation expectations → hawkish Fed → dollar rebound → gold under pressure” may weaken temporarily in April. After the sharp adjustment, a short-term bottom has begun to form, but consolidation remains necessary. Additionally, the three-month consecutive volatility makes a one-sided market less likely in the short term, and wide-range fluctuations are expected to be the main theme for April. Resistance levels near $4,800 and above, including multiple resistance points at 4780-4800, 4920, and the $5,000 round number, may limit the rebound height. Key resistance zones include 4780-4800 USD, 4920 USD, and the $5,000 mark; important support levels are at 4350-4400 USD and the 4200 USD round number.

(Author: Research Team of Beijing Gold Economy Development Center)

【Gold Time】 is a special program jointly produced by Xinhua Finance and China Gold News, focusing on the gold jewelry market. It covers policy developments, investment information, risk analysis, and provides authoritative, professional, and comprehensive financial information services in the gold jewelry sector. Xinhua Finance is the national financial information platform built by Xinhua News Agency.

Editor: Wu Zhengsi