- Spot gold fell to around $4,527 per ounce during the Asian session on Friday, dropping approximately $16 within the day. Short-term bullish momentum was directly suppressed by the potential marginal breakthrough expectations of the US-Iran peace talks draft.
- Kevin Warsh was officially sworn in as the incoming Federal Reserve Chairman at the White House. Coupled with the thin liquidity environment before the Memorial Day long weekend, the volatility in the gold market may face nonlinear amplification at the New York close.
- The short-term trend of gold prices shows a clear downward constraint tone. On the daily chart, the 21-day and 50-day moving averages have formed a strong first upper resistance band in the range of $4,615.51 to $4,667.08.
Geopolitical Diplomacy Rumors and Profit-Taking of Safe-Haven Funds
In intraday high-frequency flow monitoring, the phased exit of bullish funds was mainly catalyzed by rumors of the final draft of the US-Iran peace agreement. Previously, Al Arabiya disclosed that under Pakistan's mediation, both parties might officially announce an official statement within hours. Although key decision-makers like US Secretary of State Rubio later pointed out that both sides still maintain opposing positions on Tehran's uranium stockpile and the control of the Strait of Hormuz, the sporadic emergence of peace expectations still triggered a stepwise revaluation of geopolitical premiums, leading some safe-haven funds to adopt a profit-taking defensive strategy in the spot gold market.
Central Bank Policy Cycle and Repricing of Tightening Probability
Apart from geopolitical games, the stickiness of macro inflation expectations has exerted lasting valuation pressure on the non-interest-bearing asset gold. Due to the lack of clear guidance on when the Strait of Hormuz will reopen, international oil prices continue to remain relatively high in the short term, exacerbating the cost input pressure on the global supply chain. This environment objectively raises the probability of the Federal Reserve taking another rate hike action by the end of 2026, thereby boosting the US dollar index to regain upward momentum after retreating from a six-week high. As risk-free yield expectations rise, the conditional increase in the cost of holding gold has put all intraday bullish attempts under pressure.
White House Inauguration and Forward Liquidity Path Guidance
Global foreign exchange and commodity markets are highly focused on key political dynamics at the White House. US President Trump is scheduled to host the swearing-in ceremony of Kevin Warsh as the Federal Reserve Chairman later on Friday. As the new head of monetary policy, Warsh's potential statements on independence, inflation control, and the benchmark interest rate path will directly re-anchor the market's forward pricing of dollar liquidity for the second half of the year. If the new chairman releases unexpectedly hawkish policy stances, the short-term technical logic of the gold market may face deeper structural sell-offs.
Thin Liquidity Black Swan Risk Before the Long Weekend Holiday
Another micro variable that has aroused high vigilance among technical analysts is the liquidity gap risk at the New York close. As US stock and bond markets will be closed next Monday for Memorial Day, and the bond market closes early on Friday, market trading will tend to be thin before the long weekend. In the context of liquidity scarcity, any sudden geopolitical news or slight changes in capital flows could lead to amplified price movements in the spot market. Traders are currently on high alert to prevent unexpected severe fluctuations in prices during the closing phase.
