On Thursday (March 12) in early Asian trading, spot gold traded around $5152 per ounce, pressured by a stronger dollar and escalating inflation concerns that could push up interest rate expectations. US February CPI data met expectations, shifting market focus to PCE data. Analysts pointed out that gold prices are being pulled by safe-haven demand due to war and concerns about prolonged high interest rates. Meanwhile, Standard Chartered Bank remains optimistic in the long term, believing that gold will resume its upward trend after short-term profit-taking.

The current short-term decline in gold prices is the result of the combined effects of a strong dollar, rising inflation expectations, and the delayed Fed rate cuts. However, the escalation of conflict in the Middle East, the bombshell warning of $200 oil prices, and the escalation of global trade frictions are brewing an epic rebound for gold. However, in the short term, investors should remain wary of further pressure from the US dollar index breaking through the 100 mark. But if the PCE data is disappointing or there are any signs of escalation in the Middle East conflict, gold could experience a sharp rise.

From the daily chart of spot gold, the price is currently weakening. It tested the middle Bollinger Band support in the early morning. Although it maintains the upward trend of the past few days, the MACD indicator shows a potential divergence, suggesting a risk of breaking below support and testing $5050 or even $4930. However, this level would also be a good entry point for bullish positions.

The 4-hour chart of spot gold also shows a bottoming out. Therefore, in terms of trading strategy, focus on the middle Bollinger Band support, the 30-day moving average support, and even the 60-day moving average support before going long, or consider going long after a break and hold above $5200. In the meantime, remain on the sidelines. In summary, the recommended short-term trading strategy for gold today is to primarily sell on rallies and secondarily buy on dips. The key resistance level to watch in the short term is 5180-5230, while the key support level is 5080-5030.

Disclaimer: The article is contributed by the market analyst from Bitop market observation team. The content is solely for personal opinions and sharing. The analysis is time-sensitive and provided for reference and discussion only. It does not constitute any investment advice. The market is risky, so investing should be done cautiously.