Gold prices rise slightly with Iran war escalation in focus

Gold prices rose slightly in Asian trade on Monday after logging wild swings last week as focus remained squarely on a potential escalation in the U.S.-Israel war on Iran. 

Spot gold rose 0.4% to $4,509.51 an ounce by 23:36 ET (03:36 GMT), while gold futures rose 0.4% to $4,537.40/oz. Spot gold had fallen as low as $4,000/oz last week before rebounding back to near $4,500/oz by Friday. 

Among other precious metals, spot silver fell 0.9% to $69.0915/oz, while spot platinum rose 1.8% to $1,898.73/oz. 

Gold rebound appears technical, macro headwinds remain- OCBC 

OCBC analysts said gold’s rebound from last week’s lows appeared to be largely technical, especially as prices fell as much as 20% from when the Iran conflict began. 

They noted that bearish momentum appeared to be showing some signs of easing, with gold’s relative strength index recovering from oversold territory. 

But they warned that it was uncertain whether gold’s recovery could be maintained, with key resistance levels for spot gold seen at $4,624/oz, $4,670/oz, and $4,850/oz. 

“A more durable recovery would likely require prices to reclaim and hold above these levels. Failing which, gold may continue to trade on a softer footing,” OCBC analysts said.

They noted that high energy prices risked keeping inflation pressures high, in turn driving up Treasury yields and “creating a more challenging environment for gold in the interim.”

Iran war escalation in focus as Houthis attack Israel

Markets remained wary of a potential escalation in the Iran war after the Yemen-based, Iran-backed Houthi group attacked Israel over the weekend. The Houthis could open up a new front in the war, given that they have the capacity to launch strikes in the Red Sea. 

Iran said it was prepared for a ground invasion by the U.S., especially after reports late last week showed Washington mobilizing thousands of troops to the Middle East. 

President Donald Trump told reporters that negotiations with Iran were going well and that a deal could be close. But he did not specify a clear timeline, while also warning of more attacks against Tehran.

Trump had last week extended a deadline for attacks on Iran’s energy infrastructure to early-April. 

Iran has largely rejected the notion of direct talks with the U.S. since the onset of the war in late-February.