Gold Faces Multifaceted Pressure Amid Holiday-Thinned Trade

Gold prices fell amid a strong dollar, Turkey's gold sales, and Middle East tensions. Key $4,600 support holds as markets await London's return.

The price of gold encountered selling pressure during Easter Monday trading, navigating a complex mix of geopolitical deadlines and shifting macroeconomic forces. With the London market closed for the holiday, suspending official LBMA fixings, electronic trading was influenced by a strengthening US dollar and a key deadline in Middle Eastern tensions.

Thin Liquidity Meets Geopolitical Countdown

Trading in Asia began with a push higher, with bullion reaching an intraday peak of $4,676 per ounce. This initial strength was attributed to hedging activity ahead of an expiring negotiation deadline related to the Strait of Hormuz conflict. However, the rally proved short-lived. By 10:45 AM Central European Time, the metal had retreated to approximately $4,617, marking a decline of about 0.5% from the last official LBMA PM Fixing on April 2.

Transaction volumes were notably light, running roughly 12% below the 30-day average due to the absence of major institutional desks in London. Despite the lower liquidity, market volatility remained elevated.

A Trio of Downward Forces: Oil, Dollar, and Central Bank Sales

Several concurrent factors weighed on the precious metal. Brent crude oil breached the $111 per barrel threshold, gaining 1.4%. This surge reignited fears of stagflation and bolstered expectations that the US Federal Reserve may maintain higher interest rates for an extended period. A firmer US dollar, which saw the DXY index advance 0.5%, traditionally creates headwinds for dollar-denominated gold.

Additional pressure emerged from reports that Turkey's central bank had sold approximately 60 tonnes of gold from its reserves. The weakness spread across the precious metals complex, with both silver and platinum also trading lower. Compounding the situation, a broad equity market sell-off—the S&P 500 was down around 2.1%—forced some institutional investors to liquidate gold holdings to cover margin calls.

Technical Picture Hinges on Key Level

From a chart perspective, the psychologically significant support level at $4,600 has so far held. A sustained break below this point would expose the 200-day moving average, situated near $4,113, as the next major technical floor. The Relative Strength Index (RSI) has cooled to a reading of 52, indicating the market is no longer in overbought territory. On an hourly chart, a falling wedge pattern is forming, which is often viewed as a potentially bullish reversal signal, provided the $4,600 support remains intact until the New York session opens.

The market's next major test will come with the reopening of the London market. The first AM Fixing at 10:30 AM GMT on Tuesday will reveal how institutional players assess the landscape. Should the $4,600 level fail to hold, a deeper correction toward $4,450 is considered a likely scenario.