In evaluating gold futures across multiple time frames since the start of the year, amid escalating U.S.-Iran tensions, I observe that Israel appears to encourage the U.S. President to adopt stricter terms. Meanwhile, the agreement reached between the U.S. and Iran on February 6 in Oman now appears to be subject to divergence between the U.S. and Israel.
Now, US envoys Steve Witkoff and Jared Kushner are scheduled to meet Iranian officials in Geneva, Switzerland, on Tuesday for a second round of negotiations.
Netanyahu, however, is pushing to expand the scope of any potential deal to include impossible conditions for Tehran, such as curbing its ballistic missile programme and severing ties with regional proxies.
US Secretary of State Marco Rubio also acknowledged that the talks could fail, while emphasizing that Trump remains committed to seeing them through to a successful conclusion. Iran, meanwhile, signalled flexibility on its nuclear program and urged Washington to pursue a deal with mutual economic benefits.
On the other hand, gold futures could take a decisive move on Tuesday as the focus seems to be on a host of upcoming economic data from the U.S., as well as the minutes of the Federal Reserve’s January meeting, which are also due on Wednesday.
Industrial production data is due on Wednesday, while data, which is the Fed’s preferred inflation gauge, is due on Friday.
I find that market holidays in China and the U.S. result in sluggish trading volumes at the beginning of the week, while a mild increase in the dollar also weighs on gold prices.
On Tuesday, gold futures, after opening the day at $5,009.99, tested the day’s high at $5,011.66 and the $4,941.56, are trading at $4,977.11 while trying to defend the immediate support at the 20 EMA ($4,937).
I observed that despite a surge in indecisiveness on the deal between the U.S. and Iran, which could keep the fluctuations in gold futures, the recently emerged drift between the U.S. and Israel over the way to resolve this issue diplomatically could extend the bearish pressure on gold futures.
On the other hand, the spot gold and silver ratio () is constantly trying to find a breakout above the immediate resistance at 66.33, which could continue to extend bearish pressure on gold and silver futures as a sustainable move above this immediate resistance could result in a steep surge in the spot gold-silver ratio where the next target could be at 72.
In conclusion, I find that the recent disagreements between the U.S. and Israel on the Iran negotiations could prolong bearish pressure on gold futures, especially amidst expected selling zones and anticipated volatility in gold and silver prices this week.
Disclaimer: Readers are advised to take any position in gold and silver at their own risk, as this analysis is based only on observations.
