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Next Week's Gold Outlook: Bearish Sentiment Continues, Gold Expected to Drop, Heading South to 4500!

This week, the gold market went through a round of volatile decline. As of April 25, spot gold closed at $4708.2 per ounce, with a weekly drop of nearly 2%. From the start of the week, gold prices fell into a weak market cycle of 'bottom searching - rebound - further dip,' briefly breaking below the 4700 level and hitting a low around 4668. Although there was a rebound late Friday, it was weak and failed to hold above key moving averages, clearly indicating a short-term bearish trend.

Technical Perspective: Bearish Alignment Dominates, Signs of Bullish Divergence Emerging

Looking at the daily chart, gold has been in a downward channel since hitting a short-term high at the end of last month. This week, gold prices broke below multiple moving averages (5-day, 10-day, 20-day), forming a classic bearish alignment that layers resistance, making it tough for any short-term rebound to reverse the downtrend.

On the indicators side, the daily MACD shows a bearish crossover above the zero line with increasing green momentum bars, confirming the dominance of bearish sentiment. The key support zone is between 4650-4600; if this area breaks, the downside could open up further, with the next target around 4500.

On the 4-hour chart, the downtrend is very clear, with rebounds repeatedly pushed back by moving averages. Recent candlesticks show bearish bodies generally larger than bullish ones, indicating strong selling pressure. However, caution is advised as on Thursday, when gold touched lows near 4650, a bullish divergence pattern started to form on the 4-hour chart. This suggests short-term selling momentum might be fading, hinting at a technical rebound, though the bounce is likely limited and unlikely to change the overall weak trend.

Fundamental Perspective: Bearish Pressure Persists, Interest Rate Expectations Are Key

Fundamentally, the outlook remains bearish. The ongoing delays in Fed rate cut expectations, combined with a strong dollar index and high US Treasury yields, continue to suppress gold's upside potential. Additionally, heavy capital selling over the weekend adds to the pressure. Without major geopolitical or macroeconomic catalysts, market sentiment is cautious, and the price action is expected to remain weak and choppy, meaning rebounds are likely just opportunities to enter short positions.

Core Trading Strategy for Next Week

Overall, the strategy for next week is to sell on rallies, while waiting for key support levels to look for low-risk buying opportunities.

Specific Trading Suggestions:

If the price rebounds to around 4726 in the morning, consider opening short positions; if the rebound tests the 4740 area, add to short positions. Targets to watch are breaks below 4700, then 4640-4650, 4600, and finally 4500.