Gold Holds Near $4,050 as US-Iran Conflict Fuels Inflation Concerns
Gold prices trimmed part of their daily losses but remained under pressure, trading near $4,070 during the Asian session on Monday. The precious metal struggled to gain momentum after renewed military clashes between the United States and Iran in the strategic Strait of Hormuz pushed crude oil prices higher, reigniting global inflation concerns and weighing on investor sentiment.
Gold Technical Analysis: Bearish Momentum Remains Intact
On the daily chart, XAU/USD was trading at $4,068.30, extending its decline well below key short- and medium-term moving averages, reinforcing the prevailing bearish outlook.
Spot gold continues to trade below the 21-day Simple Moving Average (SMA) at $4,240.86, the 50-day SMA at $4,453.85, and the 200-day SMA at $4,479.26. Meanwhile, the longer-term 100-day SMA remains significantly higher at $4,674.59, highlighting a strong resistance zone that bulls must overcome before any meaningful recovery can develop.
The Relative Strength Index (RSI-14) is hovering around 36, indicating persistent bearish momentum while remaining above oversold territory.
Adding to the negative outlook, gold confirmed a Death Cross after the 50-day SMA closed below the 200-day SMA at Friday's weekly close, a technical signal often associated with further downside risk.
Immediate resistance is located around the 21-day SMA at $4,240.86, followed by stronger barriers at the 50-day SMA ($4,453.85) and the 200-day SMA ($4,479.26). A sustained breakout above these technical levels could pave the way toward the 100-day SMA near $4,674.59. Until then, gold remains vulnerable to additional selling pressure, with traders closely monitoring fresh support below the current $4,068.30 area.
Geopolitical Tensions and Fed Expectations Drive Gold Market
Investors remain highly sensitive to developments in the Middle East, continuously reassessing regional stability and its broader impact on global risk sentiment.
However, gold prices recovered part of their intraday losses after Washington and Tehran agreed to a temporary ceasefire ahead of crucial peace negotiations scheduled to take place in Doha on Tuesday. The diplomatic breakthrough eased geopolitical tensions that had recently shaken global financial markets.
The ceasefire followed several days of escalating military exchanges after an unidentified projectile struck a cargo vessel on Thursday. Both nations accused each other of violating the temporary truce originally established on June 17, prompting renewed uncertainty before agreeing to resume diplomatic talks in Qatar.
Beyond geopolitical developments, non-yielding assets such as gold continue to face headwinds from persistent expectations that the Federal Reserve will maintain a hawkish monetary policy stance. Higher interest rates typically reduce the appeal of gold, as investors shift toward interest-bearing assets.
According to the CME FedWatch Tool, markets are currently pricing in a 59.7% probability of a Federal Reserve interest rate hike as early as September 2026.
Market Focus Turns to US Jobs Report
Attention is now shifting to this week's critical U.S. labor market data, culminating in Thursday's Nonfarm Payrolls (NFP) report. The employment figures are expected to provide fresh clues regarding the Federal Reserve's future interest-rate path.
Wall Street economists forecast that the U.S. economy added approximately 114,000 jobs in June, while the national unemployment rate is expected to remain unchanged at 4.3%.