Zhang Yao Xi: Reviewing History to Predict the Future, Crude Oil Doubled First, Gold Climbed After

Zhang Yaoxi: Reviewing history to predict the future, crude oil doubles first, then gold rises
Last week in the gold market: International gold prices declined, recovering from the previous week’s lower shadow, but still fell below the 5-week moving average, with bears holding a certain advantage. Although Trump repeatedly stated that the war would end soon, easing inflation concerns, buying interest in gold was hard to sustain. Meanwhile, ongoing blockades of the Strait of Hormuz by Iran and signs of easing geopolitical tensions boosted oil prices, continuing to drive inflation fears, suppressing rate cut expectations, and causing gold prices to decline again.
Before gold prices stabilize above the 5-week moving average and close steadily, the market is expected to fluctuate and adjust, waiting for a pullback to the midline support (currently around $4,600). If prices rise back above $5,200 and stay above the 5-week moving average, bullish targets could be set at $5,400 or $5,600.
In terms of specific trends, gold opened early in the week at $5,179.47 per ounce, briefly dipped to $5,014, then rebounded. It failed to hold above the midline and 30-day moving average support. After reaching a weekly high of $5,238.30 on Tuesday, bullish momentum weakened, and prices gradually declined, falling below the 30-day moving average again on Friday, hitting a weekly low of $5,009.60, then rebounding slightly to close at $5,024.58. The weekly range was $228.7, down $45.55 from the previous close of $5,070.13, a 0.9% decline.

Looking ahead to Monday (March 16): international gold opened at $4,999.1 per ounce, quickly rebounded after a gap, but the bullish momentum remained below the moving average resistance, indicating a tendency to continue lower during the week.
Additionally, although crude oil opened higher over the weekend due to unresolved geopolitical tensions, the formation of a coalition to escort ships through the Strait of Hormuz—agreed upon by the US and other countries—reduced concerns over oil premiums, leading to a weaker early session.
While supporting gold prices, oil’s upward trend remains intact. Iran’s firm stance on escorting ships without fear of other countries’ involvement keeps the market optimistic about rising prices, which in turn heightens inflation fears and limits gold’s rebound.
Furthermore, although the US dollar index opened weaker, supporting gold, its trend remains in a rebound phase with no clear signs of weakening. Therefore, before gold prices rise above $5,200, they are still under adjustment pressure.
Fundamentally, according to Zhang Yaoxi: the safe-haven attribute of gold is diminishing. Under the influence of oil-driven volatility, inflation fears driven by rising oil prices will not only weaken rate cut expectations but also strengthen the dollar, which is bearish for gold. This reduces gold’s safe-haven appeal.

Currently, the Fed’s rate cut expectations have weakened. If inflation and expectations continue to rise, rate hike expectations will dominate, leading to sustained consolidation or downward movement in gold prices.
However, in the longer term, even if geopolitical tensions persist and inflation heats up, it could resemble the period from 2020 to 2022, when oil prices surged from near zero to $129.4 per barrel, US inflation rose from 1.23% to 8%, and the Fed raised rates sharply seven times. During that period, gold mostly oscillated around $400 before rebounding and climbing higher.
Comparing to July 2007 to August 2008, when oil prices doubled from $70 to $140 per barrel amid the subprime mortgage crisis, gold also experienced a correction followed by a continued bull run.
Additionally, due to US debt and recession concerns, even if rates are increased, the extent will be limited. The likelihood of aggressive rate hikes to beat inflation is very low, and fears of stagflation may intensify. The Fed’s data shows that the M2 money supply growth rate has stagnated around 4% over the past year, suggesting inflation may not rise as expected. Therefore, gold may remain within a broad range without reversing the bull market.

If geopolitical conflicts end, gold prices could return to the original rate cut expectations and continue rising. Under current conditions of long-term geopolitical uncertainty, central bank purchases, and ongoing rate cut cycles, all negative factors are short-term pressures. Gold still has further bullish prospects. The correction and decline in the first half of the year can be viewed as buying opportunities.
Technically, on a monthly chart, gold has shown some weakness this month but remains above the 5-month moving average and above the upward trendline broken in January, indicating a still-positive bull market outlook. If prices continue to fall this month, support levels are at the May (around 4800) or October (around 4400) moving averages, which could serve as new entry points for a bullish rebound.
Conversely, if prices break below the trendline support and close below the 4300 level, it would signal the end of the bull market, with potential declines toward $3,500 or even lower.
On the daily chart, gold is currently in a downtrend, trading below short-term, midline, and 30-day moving averages, with bears in control. The market is oscillating after an initial gap higher, and the ZZ indicator shows a bottoming out of the decline, suggesting limited downside space and potential support for a rebound near the 60-day or 100-day moving averages.

Gold: support at around $4,955 or $4,870; resistance at around $5,070 or $5,120.
Silver: support at around $78.30 or $75.10; resistance at around $81.00 or $83.00.
Note:
Gold TD = (International gold price × exchange rate) / 31.1035
A $1 fluctuation in international gold prices roughly causes a $0.25 change in Gold TD (theoretical).
US futures gold price = London spot price × (1 + gold swap rate × days to expiry / 365)
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Reviewing history and causality, interpreting current environments, and forecasting future trends—adopting bold predictions with cautious trading principles. – Zhang Yaoxi
The above opinions and analyses represent only the author’s personal views, for reference only, not as trading advice. Operate at your own risk.
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