Prices fell to $5,023 per ounce on Monday, extending losses after two straight weeks of declines. Pressure on the market persists amid rising oil prices, with the situation becoming more problematic following a US attack on Iran's Kharg Island oil terminal, one of the country's main export hubs.
The attack prompted retaliation from Tehran, with Iran attacking Israel and energy infrastructure in several Arab nations. These developments have intensified concerns about global supply stability.
The military standoff between the United States, Israel and Iran has entered its third week with no signs of resolution. Volatility in financial markets remains high.
Rising energy prices are increasing inflation risks and reducing the likelihood of an imminent monetary policy easing. Against this backdrop, gold is facing pressure as higher interest rates diminish the attractiveness of non-profitable assets.
The Federal Reserve is expected to maintain its interest rate this week. Monetary policy decisions are also expected from many other central banks, including those in the eurozone, the United Kingdom, Japan, Switzerland, Australia, Canada, China, Brazil and Russia.
Technical analysis
On the H4 chart, the market formed a consolidation range around the $5,092 level. It has now broken down, probably continuing the correction towards $4,953. The MACD indicator confirms the current momentum, with its signal line below the center line and pointing sharply downwards.
According to the H1 chart, the market has broken below the $5,035 level and is forming a wave towards $4,953. Looking ahead, a wave of corrective growth towards $5,200 is possible, with potential for the trend to extend to $5,412. The stochastic oscillator supports the short-term bearish scenario, with its signal line remaining above the 50 level and under pressure to decline towards the 20 level.
Conclusion
Gold continues to face headwinds as rising geopolitical tensions in the Middle East drive up oil prices, reinforcing inflation concerns and delaying expectations of rate cuts from the Federal Reserve. The third week of military confrontation shows no signs of abating, keeping markets on edge. With the Federal Reserve widely expected to keep rates steady this week and technical indicators pointing to a further decline, gold's immediate trajectory looks vulnerable. A break below key support could accelerate losses towards $4,953, although moderate surprises from this week's central bank meetings could offer temporary relief.
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.
