On Friday the price remained below $4,700 per ounce. For the week, the price is expected to decline by approximately 3.0% as rising tensions between the United States and Iran over the Strait of Hormuz support rising energy prices and raise inflation concerns.
Both sides maintain their blockades of this strategically vital waterway, and peace talks show little progress.
US President Donald Trump said on social media on Thursday that he had ordered the US Navy to attack and destroy any ships laying mines in the strait. US troops also boarded a supertanker carrying Iranian oil in the Indian Ocean.
Meanwhile, the truce between the United States and Iran has been extended indefinitely, as Washington awaits a new formal proposal from Tehran. The truce between Israel and Lebanon has also been extended for three weeks.
High energy prices are reinforcing inflation risks and strengthening expectations of possible interest rate increases by central banks. Together, these factors are weighing on gold, reducing its appeal as an unprofitable asset.
Technical analysis
On the H4 chart, gold is trading within a consolidation range around the $4,685 level. An upward break could push prices towards $4,755, while a downward break could lead to a fall towards $4,616. The MACD indicator confirms the current bearish momentum, with its signal line below the center line and pointing firmly downwards.
On the H1 chart, gold has broken below the $4,693 level and continues declining towards $4,616. A corrective bounce towards $4,750 (testing from below) is likely, followed by a possible drop to $4,690. The stochastic oscillator supports this scenario, with its signal line below 50 and pointing firmly towards 20.
Conclusion
Gold is set to close the week down nearly 3.0% amid ongoing geopolitical tensions between the United States and Iran, which continue to dominate market sentiment. Both sides maintain their blockades of the Strait of Hormuz, while peace talks show little progress. President Trump's stance, ordering the Navy to destroy mines and board an Iranian oil tanker, has kept energy prices elevated and inflation concerns firmly in the spotlight.
Although truces with Iran and Lebanon have been extended, the lack of significant progress towards a resolution continues to weigh on gold. With central banks potentially leaning towards rate hikes amid persistent inflation, the unprofitable metal faces a challenging environment. Technical indicators suggest a further decline towards $4,616 in the short 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.
