Gold edges down to $4,800 as rising yields and Oil are driven by Iran tensions
Gold Prices Slip as Geopolitical Tensions Rise
At the start of the week, gold (XAU/USD) prices declined as investor sentiment soured due to intensifying US-Iran tensions. The precious metal's upward movement was further restrained by stable US Treasury yields and a surge in oil prices. As of now, XAU/USD is trading at $4,803, marking a 0.70% decrease.
Geopolitical Unrest Limits Gold’s Upside
Over the weekend, Iran closed the Strait of Hormuz, demanding an end to the US blockade that has restricted Iranian vessels. In response, the US intercepted an Iranian ship after previously instructing it to return to its port of origin.
On the diplomatic front, US Vice President JD Vance is set to head the American negotiation team, joined by Steve Wytkoff and Jared Kushner. While reports from the New York Times suggested that an Iranian delegation would visit Islamabad, the Fars agency refuted this, stating there are no current plans for such a trip.
President Donald Trump indicated that the ceasefire is unlikely to be extended, emphasizing that it will conclude on Wednesday evening in Washington. He also reiterated that the blockade would persist until Iran agrees to a deal.
US Treasury yields are trending upward, with the 10-year yield rising nearly two basis points to 4.266%. This increase has put pressure on gold prices, which dropped to a five-day low near $4,735 earlier in the session.
Federal Reserve Developments and Market Expectations
Kevin Warsh, the nominee for Federal Reserve Chair, is expected to affirm his commitment to the independence of monetary policy during his confirmation hearing on Tuesday, according to a statement obtained by Reuters.
Meanwhile, Federal Reserve officials have entered a blackout period ahead of the upcoming policy meeting scheduled for April 28-29. Markets anticipate that interest rates will remain unchanged, although there is an expectation of 14 basis points of easing by year-end.
With a light economic calendar, traders are awaiting Tuesday’s release of Retail Sales data and Kevin Warsh’s Senate hearing. Additional figures, including the ADP Employment Change four-week average, are also on the horizon.
Technical Analysis: Gold Hovers Near $4,800 with Downward Bias
Gold prices are consolidating around the $4,800 mark, exhibiting sideways movement. The Relative Strength Index (RSI) remains steady in bullish territory, suggesting a mild preference for buyers, though momentum is not particularly strong.
Last Friday, gold reached a new high of $4,890(UTC+8), but the RSI declined, indicating a slight bearish divergence that could signal a deeper pullback.
- If XAU/USD closes Monday below $4,800, the next support is at the 100-day Simple Moving Average (SMA) of $4,706, with further downside at the 20-day SMA of $4,665.
- On the upside, resistance is first seen at $4,850, followed by the 50-day SMA at $4,890, just below the $4,900 level.
Gold Daily Chart
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
US Treasury volatility surges, triggering alarms! BofA’s Hartnett warns of rising deleveraging risks as higher yields become main threat to the market
Bank of America strategist Michael Hartnett warns that the recent sharp rise in volatility in the US bond market is increasing the risk of broader deleveraging in financial markets.
U.S. diesel prices surge 83% this year! Apollo Chief Economist warns: Cost pass-through may make core inflation more stubborn, Federal Reserve can't ignore it
Torsten Slok, Chief Economist at Apollo Global Management, has warned that the inflation threat posed by the surge in U.S. diesel prices to historic highs may be more serious than the Federal Reserve currently realizes.
Goldman Sachs Estimates AI Compute Power Gamble: Six Tech Giants Need to Earn an Extra $1.42 Trillion from 2028 to 2030 to Sustain 15% ROIC
Goldman Sachs recently released a research report on the US technology industry, estimating the necessary scale of the AI economy required to justify the ROIC of hyperscale cloud providers' AI capital expenditures.
