Gold prices rose on Wednesday, reaching their highest level in nearly two weeks, supported by a weaker U.S. dollar after U.S. President Donald Trump said the conflict with Iran could come to an end within the next few weeks.

Spot gold gained 1% to $4,717.82 per ounce at 07:12 GMT, marking its highest level since March 20. Meanwhile, the U.S. dollar fell 0.4%, making gold more attractive to investors holding other currencies.

Trump stated that Tehran does not need to reach a formal agreement as a precondition for de-escalating the conflict, and he is expected to provide further updates on the Iran situation in his Wednesday evening address (U.S. time). News suggesting that the conflict could end within 2–3 weeks, even if the Strait of Hormuz has not yet reopened, helped improve market sentiment, supporting a rebound in U.S. equities and lifting gold prices as well.

If geopolitical tensions continue to ease, expectations for the Federal Reserve to return to a more accommodative policy stance could re-emerge. In that scenario, lower real yields would be a supportive factor for gold prices.

However, it is worth noting that gold fell more than 11% in March, marking its steepest monthly decline since October 2008. The main reason was persistently high oil prices, which intensified inflation concerns and reinforced expectations of a more hawkish monetary policy stance.

Technical Analysis: The Recovery Is Stronger Than Expected

Gold has been maintaining a strong recovery momentum from the $4,100/oz bottom zone. However, when examining the price structure more closely, the current rally still does not clearly display the characteristics of a sustainable uptrend. Instead, it appears more like a complex corrective phase within the broader primary downtrend.

With the rebound extending longer and becoming stronger than expected, the market is now opening up two notable scenarios:

Scenario 1:

Gold is still moving within the downward wave from B gold to C gold, following a five-wave internal structure: l1 – t1 – l2 – t2 – l3 white, also known as Million-Dollar Model No. 2. At the moment, price is moving within the recovery leg from l2 white to t2 white.

If price fails to break through the key resistance levels, then once wave t2 is completed, wave l3 is likely to return and continue pushing prices lower.

If gold breaks above the descending trendline (drawn from peak B to t1), this scenario will gradually lose its advantage and should give way to an alternative outlook.

Scenario 2:

The $4,100/oz bottom zone on March 23 has been confirmed as the short-term low, corresponding to point A white. From this level, the market may enter a broad consolidation phase within an A–B structure before determining its next directional move.

Under this scenario, gold could fully recover back above the $5,000/oz level if the current rebound momentum continues to hold.

Conclusion

The current rally is being supported by market sentiment and geopolitical expectations, but from a structural perspective, the market has not yet clearly confirmed a true trend reversal.

In the short term, the overhead resistance zone especially the descending trendline will play a decisive role in determining which scenario prevails. If price fails to break above it, the broader downtrend is likely to remain dominant. On the other hand, a clear breakout would open the door for the market to shift into a larger and more complex consolidation phase.

Ebila AI continues to closely monitor market developments, combining both fundamental and technical analysis to help investors gain a more comprehensive view and make more effective decisions.

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