On April 13, our analysis last Friday indicated that gold's short-term rebound was significantly capped by factors including high oil prices exacerbating inflation and dampening expectations for Federal Reserve rate cuts. The metal was expected to remain range-bound between $4,700 and $4,800. Consequently, trading recommendations suggested monitoring the support level at the key $4,700 mark and resistance at $4,800, followed by $4,860.
Subsequent market movements aligned with this outlook. During Friday's European session, gold stabilized after a dip to $4,730 and then fluctuated higher, encountering resistance near $4,795 during the U.S. session before settling around $4,740, maintaining its consolidation within the anticipated range.
This Monday, gold opened with a gap down below $4,700. After testing support and stabilizing around $4,644, it gradually recovered, reclaiming the $4,700 level and filling the morning gap. The price encountered resistance near $4,740 and is currently trading near $4,716.
Market analysis suggests that while gold initially benefited from a brief oil price drop following a reported two-week ceasefire agreement, its upward momentum was constrained by improved risk sentiment boosting equities, renewed regional tensions following an Israeli strike in Lebanon, and strengthened market expectations that the Fed will maintain higher interest rates for longer.
The collapse of U.S.-Iran negotiations over the weekend and the subsequent announcement of a full blockade of the Strait of Hormuz caused oil prices to surge at the open, intensifying inflation concerns. This initially pressured gold lower, but the metal demonstrated resilience by quickly stabilizing and rebounding, supported by its safe-haven appeal.
Looking ahead, while negotiations have broken down, both parties have signaled a potential willingness to resume dialogue, indicating a possible phase of conflict alongside talks. Investors are advised to monitor geopolitical developments closely.
On the daily chart, gold continues to trade in a high-level consolidation pattern after meeting resistance. Key support is seen at the psychological $4,700 level, which held firm during multiple tests last week, followed by the day's low of $4,644, near the Bollinger Band midline. Immediate resistance is at the day's high of $4,740—also a previous support level—followed by the $4,800 mark, which capped advances last Thursday and Friday.
Technically, while the 5-day moving average and MACD indicator show a bullish crossover, the RSI is turning lower, and the KDJ is beginning to form a bearish crossover, collectively signaling significant near-term pressure on gold's rebound.
Intraday Outlook: Gold is consolidating at elevated levels following the failed U.S.-Iran talks and a surge in oil prices, which stoked inflation fears. A range-trading strategy is recommended, with support at $4,700 and then $4,644, and resistance at $4,740 followed by $4,800.
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