Gold Struggles Near 100-Day SMA as Trump Escalates Pressure on Iran
Gold prices are hovering around the 100-day Simple Moving Average (SMA) as geopolitical tensions intensify following renewed threats from former U.S. President Donald Trump toward Iran. Despite opening with a bearish gap on Monday, the precious metal managed to hold above the key $4,600 level, showing limited resilience amid rising market uncertainty.
Gold Remains Under Pressure Amid Geopolitical Tensions
Market sentiment turned cautious after hopes for de-escalation in the Middle East faded. Trump warned of potential strikes on Iran’s infrastructure if the Strait of Hormuz remains blocked, triggering renewed risk-off sentiment across global markets.
As a result, gold maintains a short-term bearish bias, trading below both the 21-day SMA at $4,774.95 and the 50-day SMA at $4,943.64. This technical setup continues to cap any upward momentum, keeping recent rebounds within a corrective phase.
Technical Outlook: Key Support and Resistance Levels
Momentum indicators reinforce the bearish outlook. The Relative Strength Index (RSI 14) remains around 45, signaling weak buying interest following a previous oversold bounce.
- Immediate support is seen at the 100-day SMA near $4,654.27
- A decisive break below this level could expose the next major support at the 200-day SMA around $4,150.48
- On the upside, gold needs a daily close above the 21-day SMA at $4,774.95 to ease downside pressure
- Further resistance stands at the 50-day SMA near $4,943.64, which limits a stronger recovery
Trump’s Threats Add to Market Volatility
Gold’s struggle early Monday comes as traders digest Trump’s social media statements posted Sunday, where he escalated pressure on Iran and extended the deadline to reopen the Strait of Hormuz.
In a controversial post, Trump warned of severe consequences if the waterway remains blocked, raising fears of further escalation in the region. In response, Iran’s Islamic Revolutionary Guard Corps (IRGC) signaled potential retaliation against U.S. economic interests if civilian targets are attacked.
Reports also suggest Iran is considering a significantly stronger response should tensions escalate further, keeping global markets on edge.
Strong US Dollar Weighs on Gold Prices
The U.S. Dollar (USD) continues to gain strength as investors seek safe-haven assets amid geopolitical risks. This trend puts additional pressure on USD-denominated gold.
Adding to the bearish outlook, expectations for a more hawkish Federal Reserve remain elevated following stronger-than-expected U.S. labor market data.
According to the Bureau of Labor Statistics (BLS), Nonfarm Payrolls surged by 178,000 in March, far exceeding market expectations of 60,000. Meanwhile, the unemployment rate unexpectedly dropped to 4.3%, reinforcing the Fed’s cautious stance on rate cuts.
Market pricing currently suggests a high probability that the Federal Reserve will hold interest rates steady through the remainder of the year, further supporting the U.S. Dollar.
Market Focus: Strait of Hormuz and Fed Policy
Looking ahead, traders are closely watching developments surrounding the potential reopening of the Strait of Hormuz. Any escalation or resolution could significantly impact gold prices.
Additionally, thin trading conditions due to the Easter holiday may amplify price volatility as U.S. markets return from the extended weekend.