Gold has slipped back under pressure after Trump said the US would reach a deal with Iran after the November elections, sending oil prices, Treasury yields and the dollar higher. Traders are now watching whether Iran's offer to reopen the Strait of Hormuz within seven days draws a US response, a move that would pare back Fed rate hike bets and could support the metal.
Gold came back under pressure after Trump poured cold water on hopes of an earlier end to the Iran war, repeating that the US would make a deal with Tehran after the November elections. Oil prices, Treasury yields and the dollar rose on the remarks and weighed on the metal.
US PMIs add to the pressure
The losses then extended after US PMIs came in much stronger than expected, lifting Fed rate hike bets and pushing real yields higher.
Iran's Hormuz offer back in focus
Markets have since shifted attention to renewed hopes for a deal, after Iran put an offer on the table promising to reopen the Strait of Hormuz within seven days if the US meets its terms. Iran's Foreign Minister Araghchi is staying in New York over the weekend to await a US response.
A breakthrough would likely see aggressive rate hike bets pared back and real yields fall, a positive outcome for gold. A prolonged stalemate, or a re-escalation, would likely keep financial conditions tight and continue to weigh on the safe-haven metal.
Support and resistance levels to watch
On the daily chart, gold is trading below the key support zone around the 4,300 level, where sellers may keep stepping in toward the 3,885 level. Buyers, on the other hand, want to see price reclaim that zone to position for a move toward 4,700, with 4,510 as the first target.
On the four-hour chart, a minor downward trendline defines the bearish structure. Sellers may lean on that trendline for a break below support toward new lows, while buyers need a break higher to build bullish bets toward the 4,510 level. No major data is scheduled today, so traders will instead keep watching for any US response to Iran's proposal.
Source: Investinglive
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