Gold prices rose as concerns over inflation eased, following signs that the United States and Iran are on the verge of reaching an agreement to reopen the Strait of Hormuz.
Gold prices surged 1.6% to around $4,580 per ounce, erasing last week’s modest decline. U.S. officials told reporters on Sunday that both sides were still negotiating the specific wording of the deal, and it could take several days to reach a final agreement. U.S. President Donald Trump said on social media that he would not rush into a deal.
Earlier, U.S. Secretary of State Marco Rubio said that “some good news” could come from the Strait of Hormuz within the next few hours, as Tehran and Washington are advancing peace talks.
Gold’s reaction to these news developments has remained “relatively flat.” Trump’s statements have repeatedly ended without follow-through, and the market needs to see more concrete evidence of cooperation from Iran before confirming a price increase.
As new Federal Reserve Chair Kevin Warsh takes office, investors will be looking for clues about his views on the economy.
Christopher Wong, a strategist at Overseas Chinese Bank, said investors may be reluctant to chase the gold rebound given that key details of Iran’s nuclear program have yet to be released. He added that markets in the United States, the United Kingdom, Hong Kong, and South Korea were also closed on Monday due to holidays, leading to “reduced holiday liquidity.”
Technical Analysis:
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Gold: After gapping higher, the price is now retracing to test the support of the demand zone left in the morning session. We suggest watching for new bullish signals within the yellow zone. Alternatively, you can simply wait for the price to break below the lower boundary of the yellow zone and then place a buy stop at the upper boundary level. For exact positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: U.S. markets are closed for the holiday. Although prices opened higher with a gap up, they lack liquidity support, and the effectiveness remains to be confirmed. We recommend waiting one day. For detailed positions, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Prices have sharply declined from above 100 to below 95. The main strategy for the day is to sell after a rebound and retest of liquidity. If the intraday rebound fails to reach the yellow zone, a breakout and pullback from a new support level formed around 95 could also be attempted once. For detailed levels, please consult the plugin.
(Crude Oil 15-minute Chart)
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