It remains around $4,611 an ounce on Monday as markets assess Donald Trump's proposal to escort commercial vessels through the Strait of Hormuz, along with tentative signs of progress in negotiations between the United States and Iran.
The plan is to help civilian ships from neutral countries safely leave the conflict zone and restore access to the sea route. At the same time, Iran has stated that it is reviewing the US response to its latest proposal, which has helped support hopes for a diplomatic resolution.
However, the conflict, now entering its tenth week, continues to drive up energy prices and intensify inflationary pressures. This has reinforced expectations that central banks could keep interest rates elevated for longer, or even tighten policy further if inflation risks persist.
Since the start of the confrontation, gold remains under pressure and has lost around 12% of its value. At the same time, data from the World Gold Council shows that central banks continue to increase their gold reserves, providing underlying support to long-term demand.
Technical analysis
On the H4 chart, it is consolidating above the USD 4,600 level. A bullish move could pave the way for a corrective bounce towards $4,704. On the downside, a further decline towards $4,430 cannot be ruled out. The MACD indicator supports the current recovery bias: the signal line remains below the zero mark but continues to point firmly upwards, indicating strengthening bullish momentum.
According to the H1 chart, the market has broken below the $4,620 level and is extending its move towards $4,580. In the short term, a bounce towards $4,690 remains possible as a retest from below, followed by a possible pullback to $4,625. After that, a new bullish move towards $4,741 is possible. The stochastic oscillator supports this scenario, with the signal line remaining below 50 and pointing towards 20, indicating short-term bearish pressure.
Conclusion
Gold remains caught between cautious optimism about diplomacy and persistent inflation risks driven by the Middle East conflict. While near-term price developments remain fragile, continued central bank demand and geopolitical uncertainty are likely to provide underlying support for gold in the medium to long term.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
