- The outlook for gold will largely depend on whether diplomatic progress continues; renewed tensions could revive bullish momentum, while further easing may keep prices under pressure.
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In last week’s technical outlook for gold, we were sitting on the highlighted yellow circle, expecting that a break below the lower boundary of the channel could lead to a bearish bias. That’s where we are standing right now.
The bearish scenario unfolded as anticipated, with gold decisively breaking below the channel support and accelerating lower. The breakdown confirmed that sellers had regained control of the market. It’s triggering a sharp decline toward the 4,018 support area. This move reinforced the broader downtrend structure, characterized by a series of lower highs and lower lows.
On Thursday, the price began to recover after President Trump stated that there would be no further strikes on Iran. The de-escalation of geopolitical tensions eased concerns about higher energy prices, inflationary pressures, and the possibility of additional interest rate hikes. As a result, gold rebounded sharply from 4,018 to 4,219. However, the recovery stalled at the 4,219 resistance level, where sellers re-entered the market. The rejection from this area has limited the upside momentum, with gold currently trading around 4,204.
Technically, the immediate resistance remains at 4,219, followed by 4,247, marking the next barrier for any sustained recovery. A decisive break above these levels could pave the way toward 4,363, where a previous support zone has now turned into resistance.
On the downside, the key support sits at 4,018, which successfully halted the recent sell-off. A decisive breakout below this level would likely expose the psychological 4,000 area and potentially extend the bearish move further.
The moving averages continue to signal a bearish outlook. The short-term moving average remains below the medium-term average, while both are trading beneath the long-term trend line. This alignment indicated that the broader trend remains negative despite the recent rebound. It’s most likely that the gold price would see a consolidation period within a tight range between 4,018 and 4,219 until encountering direction.
Meanwhile, the RSI has recovered from oversold territory and is currently hovering near the neutral 50 level. This suggests that selling pressure has eased in the short term, but buyers have yet to establish strong momentum.
While the geopolitical-driven recovery has provided temporary relief for gold prices, the broader structure remains bearish. The market will need to reclaim and hold above the 4,219–4,247 resistance zone to improve the outlook.
Key Geopolitical Developments Influence Gold Price:
- U.S. President Donald Trump stated that a peace deal with Iran could be signed as early as this weekend, raising hopes of ending the three-month conflict. However, Iran said it has not yet made a final decision and is still reviewing the proposal.
- The proposed agreement is expected to reopen the Strait of Hormuz, which Iran has largely closed during the conflict. The waterway is one of the world’s most important oil shipping routes, making its status critical for global energy security.
- Although negotiations are progressing, clashes have continued around the Strait of Hormuz. Recent incidents include U.S. forces shooting down Iranian drones and Iran disrupting tanker traffic, highlighting the fragility of the situation.
- Tehran is reportedly seeking sanctions relief, access to frozen assets, and recognition of its role in the Strait of Hormuz as part of a broader settlement. Iran has also stressed that it will not cross its “red lines” during negotiations.
- Trump announced that planned U.S. strikes on Iran were canceled due to progress in talks, marking a shift from recent escalation toward diplomacy.
