Gold staged a strong rally in the latter part of last week, driven by expectations of an imminent agreement between the United States and Iran. The initial catalyst was a report on Thursday indicating that Washington and Tehran had reached a 60-day memorandum of understanding (MoU), pending final approval from President Trump.
A second wave of buying emerged on Friday after Trump announced on Truth Social the lifting of the US naval blockade and said a "final determination" on a broader agreement would follow shortly from the White House Situation Room.
Gold then began surrendering those gains after the New York Times reported that Trump had not reached any decision on a new deal with Iran during the Situation Room meeting, with several important issues remaining unresolved and continuing to block a final settlement. Subsequent reports reinforced the view that an agreement may not be as close as markets had assumed.
Adding to the uncertainty, the US struck Iranian military sites again, and Iran responded with an attack on a US base in Kuwait. A ceasefire is still reportedly in place. Despite widespread expectations of an imminent deal and the reopening of the Strait of Hormuz, no official agreement has materialized — leaving markets to contend with considerable noise and little clarity.
Federal Reserve Remains the Primary Risk for Gold
The main risk factor for gold continues to be the Federal Reserve. A growing number of policymakers are pushing to drop the easing bias, making such a shift likely at the upcoming FOMC meeting. If the situation around the Strait of Hormuz remains unresolved before then, a hawkish surprise becomes increasingly possible, particularly as inflation continues to run hot and US economic data remains resilient.
In the near term, a resolution and reopening of the Strait would likely support gold through falling oil prices and increased rate-cut expectations. However, if the Strait stays closed and oil prices remain elevated, the risk of the Fed being forced to raise rates grows — a scenario that would continue to weigh on gold.
Gold Technical Analysis — Daily Timeframe
On the daily chart, gold bounced from new two-month lows and erased all of last week's losses. The price is now trading roughly in the middle of two key trendlines, offering limited directional signals from this timeframe. A closer look at shorter intervals provides more detail.
Gold Technical Analysis — 4-Hour Timeframe
On the 4-hour chart, the price broke above a downward trendline and extended the rally into the key resistance zone around the 4,585 level before pulling back. The price is now retesting the broken trendline. Buyers are expected to step in around these levels with a defined risk below 4,460, targeting a break above the 4,585 resistance. Sellers, meanwhile, will be looking for a break lower to build bearish positions toward new monthly lows.
Gold Technical Analysis — 1-Hour Timeframe
On the 1-hour chart, the trendline retest is more clearly visible, with a swing low near the 4,488 level acting as support. This is where buyers may again look to enter with a defined risk below support, positioning for a push to new highs. Sellers will be watching for a break below that level to extend bearish momentum. The red lines on the chart define the average daily range for the current session.
Upcoming Economic Catalysts
Today: US ISM Manufacturing PMI
Tuesday: US Job Openings data
Wednesday: US ADP Employment Report and US ISM Services PMI
Thursday: Latest US Jobless Claims figures
Friday: US Nonfarm Payrolls (NFP) report
Why it matters
A growing number of Federal Reserve policymakers are pushing to drop the easing bias — a shift that could materialize at the upcoming FOMC meeting and represents an independent headwind for gold, separate from any developments on the Iran front.
If the Strait of Hormuz remains closed and oil prices stay elevated, the original article notes the risk that the Fed could be forced to raise rates — a scenario that would continue to weigh on gold.
This week's scheduled US data releases — ISM Manufacturing PMI, Job Openings, ADP, ISM Services PMI, Jobless Claims, and the Friday NFP report — each carry direct implications for Fed rate expectations and, by extension, for gold's near-term trajectory.
