Upon evaluating since the beginning of this month, I observe heightened volatility driven by abrupt policy shifts by the U.S. President concerning a ceasefire with Iran. These frequent changes, especially during weekends, have generated significant uncertainty in global markets.
were higher on Friday after Iran said the critical Strait of Hormuz was open for commercial vehicles during an ongoing ceasefire between Israel and Lebanon.
Undoubtedly, this announcement gave a big boost to Middle East de-escalation and peace hopes, ending sliding and helping U.S. stocks end at a record high.
But, I explained the reasons to doubt over the prevailing scenario in my , on Saturday.
Gold futures opened this week with a gap down, exactly the same as I predicted in my last analysis, as now all concerns revolve around global inflation, which has been elevated after the outbreak of the war in late February induced an historic surge in oil prices. I find that it would be a major challenge for the global central banks to determine how they would react to potential price pressures, which could remain a crucial source of debate this year.
The ceasefire agreement between the U.S. and Iran has been thoroughly tested this weekend, and it is unclear how long it can hold. First, Iran attacked several commercial vessels on Saturday and declared the Strait of Hormuz is under its control. Now, the U.S. has fired and seized control of the Iranian cargo ship.
U.S. President Donald Trump announced Sunday afternoon that a U.S. warship fired at an Iranian cargo ship after it tried to get past a U.S. Navy blockade and now has custody of the vessel.
On the other hand, Iran has rejected participation in a second round of talks with the United States, citing what it described as Washington’s “excessive demands” and shifting positions, state news agency IRNA reported.
Gold prices fell in Asian trade on Monday, pressured by a rebound in oil prices as U.S.-Iran tensions showed few signs of cooling before the expiry of a ceasefire later in the week.
Technical Levels to Watch
In a daily chart, gold futures, after opening at $4,773.74, tested the day’s high at $4,833.79, and the day’s low at $4,764.74, a critical support, are trading at $4,810, just below the immediate resistance at $4,826.83.
Undoubtedly, gold futures are trying to hold the significant support at the 50 EMA ($4,800). I find that the surging bearish pressure at the current levels looks evident enough to push the futures to test the next support at the 100 EMA ($4,651) in today’s session.
In a 1-Hr. chart, gold futures are showing significant bearish pressure due to the formation of a “bearish crossover” with the piercing of the 50 EMA and 100 EMA by downward moves of 9 EMA and 20 EMA, while the gold futures are trading even below the 9 EMA ($4,816) where a breakdown could push the futures below the 200 EMA ($4,794).
Disclaimer: Readers are advised to take any position in gold at their own risk, as this analysis is based only on observations.
