Prices fell to $4,300 per ounce on Tuesday, with quotes remaining under pressure amid the escalating conflict in the Middle East. Iran has denied reports of talks with the United States and said no such contacts have taken place.
Tehran dismissed Donald Trump's remarks as an attempt to influence financial markets and has continued its attacks on American targets. Meanwhile, Israel continues attacking Iranian territory.
Gold saw a brief rally earlier after Trump postponed potential attacks on Iran's energy infrastructure and announced that negotiations had reportedly begun. However, the prospects for resolving the conflict and reopening the Strait of Hormuz remain uncertain, keeping inflation risks elevated.
Since its March high, gold has lost up to 25% amid rising energy prices. The rally in commodity prices has reinforced expectations for tighter monetary policy, weighing on the unprofitable asset.
Technical analysis
On the H4 chart, the market is forming a consolidation range around the $4,383 level. A bullish breakout would pave the way for a correction towards $4,850, while a bearish breakout could see the bearish wave extend to $4,272. The MACD indicator confirms the current momentum, with its signal line below the center line but pointing sharply upwards.
On the H1 chart, the market broke through the $4,300 level and completed a wave to $4,414. Looking ahead, a corrective move back to $4,308 is likely, followed by an anticipated rise to $4,505. The stochastic oscillator supports this scenario as its signal line remains above the 20 level and shows potential to rise towards 80.
Conclusion
Gold continues to lose popularity as the market prioritizes inflation risks driven by the prolonged Middle East conflict. Despite brief moments of relief following headlines about possible negotiations, the underlying reality of sustained hostilities and uncertainty over the Strait of Hormuz keeps energy prices elevated and monetary policy expectations tilted toward tighter conditions. Having lost a quarter of its value from its March highs, gold now faces a challenging environment in which concerns about rising rates repeatedly overshadow safe haven demand. While technical indicators suggest a short-term rebound is likely, the broader trend remains firmly bearish.
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.
