Gold is holding the previous pullback from two-week highs of $4,595 early Monday, as buyers struggle to find a fresh impetus amid looming uncertainty surrounding the ceasefire extension deal between the United States (US) and Iran.
Gold awaits clarity on the US-Iran deal in the NFP week
Following last week’s reports that both sides were closing in on a 60-day truce, scepticism prevails in Asia this Monday as the new week kicks off.
However, a lack of clarity remains on the ceasefire, with markets still awaiting US President Donald Trump to review the proposal and respond to Iran.
Axios reported early Monday that Trump wanted to reinforce multiple points of the deal that he felt were important, such as what to do with Iran’s nuclear material, adding that Trump was informed it could take three days for Iran to respond.
Meanwhile, Iranian Foreign Minister Abbas Araghchi confirmed on Sunday that talks and message exchanges with the US were ongoing. Iran’s parliamentary National Security Committee spokesman Ebrahim Rezaei said that the country has made no nuclear commitments to Washington.
These remarks clearly highlight that sticking points continue to remain between the US and Iran, keeping the ceasefire extension in limbo while reviving the US Dollar (USD) safe-haven appeal. This, in turn, checks the Gold price upside.
At the same time, Oil prices are staging an impressive bounce, with WTI recovering from six-week troughs. The ongoing strikes between Israel and Lebanon fuel the latest rebound in the black gold.
Renewed Oil price uptick reignites inflation concerns and bolsters hawkish expectations around the US Federal Reserve’s (Fed) interest rate outlook.
Increased hawkish Fed bets further support the USD, leaving Gold buyers struggling, despite last week’s late rebound.
In the week ahead, risks appear to the downside for the bright metal unless there is a decisive breakthrough in the US-Iran peace deal. Additionally, the critical US Nonfarm Payrolls (NFP) data due on Friday could also help alter Fed rate expectations and determine the Gold price direction in the coming weeks.
The immediate focus now remains on the US ISM Manufacturing PMI data due later in the day for fresh trading incentives, while US-Iran headlines will continue to drive market sentiment and Gold volatility.
Gold price technical analysis: Daily chart
In the daily chart, XAU/USD trades at $4,522.25. The metal remains under pressure in the near term as price holds below the 21-day simple moving average (SMA) at $4,582.65 and the 50-day SMA at $4,628.82, while still trading above the more distant 200-day SMA at $4,411.29. This configuration suggests a corrective bearish bias within a broader uptrend, with the Relative Strength Index (RSI) around 44 hinting at subdued but not extreme downside momentum.
On the topside, initial resistance is aligned with the 21-day SMA near $4,582.65, followed by the 50-day SMA at $4,628.82 and then the 100-day SMA, which strengthens a higher resistance band around $4,802.34. On the downside, immediate focus is on the nearby pivot zone around the current price, ahead of firmer support at the 200-day SMA near $4,411.29, with the prior downward trend-line break area around $4,282.51 emerging as a deeper structural floor if selling accelerates.
(The technical analysis of this story was written with the help of an AI tool.)
(The title of the story was corrected on June 1 at 3.38 GMT to say that “below $4,580-$4,630 supply zone,” not $4,5820).
Economic Indicator
Nonfarm Payrolls
The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months’ reviews and the Unemployment Rate are as relevant as the headline figure. The market’s reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.
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Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
