Gold was up around 1.5% by midday in London on Monday, holding above the $4500 level and finding support along with equity indices. We saw another bit of a short squeeze rally in risk assets after reports suggested, and later confirmed by Trump himself, that the US was in “serious discussions” with what the US President called “A NEW, AND MORE REASONABLE, REGIME” to end the conflict in Iran. However, we have seen these sorts of remarks repeatedly, only for the Israeli bombing to continue and Iran striking back in retaliation. In fact, Iran’s Speaker of Parliament, Ghalibaf, yesterday posted a heads-up on X, telling us exactly what to expect and how the move should then be faded. It is difficult to know who to belief, which makes this gold forecast and trading these headline-driven markets in general quite difficult to navigate.
Same old jawboning from Trump?
Is this another pump before markets dump later, or is this finally the turning point in the conflict?
According to Trump, great progress has been made but, he warned that “if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately “Open for Business,” we will conclude our lovely “stay” in Iran by blowing up and completely obliterating all of their Electric Generating Plants, Oil Wells and Kharg Island (and possibly all desalinization plants!), which we have purposefully not yet “touched.”
This comes after Speaker of Islamic Republic of Iran’s Parliament, MB Ghalibaf, posted on X the following, yesterday:
Heads-up: Pre-market so-called “news” or “Truth” is often just a setup for profit-taking. Basically, it’s a reverse indicator. Do the opposite: If they pump it, short it. If they dump it, go long. See something tomorrow? You know the drill.
What is driving gold prices?
Oil markets remain a key driver here. Crude has stayed firm after a tense weekend, with fighting continuing and the Houthis now involved. Despite Donald Trump’s repeated claims that talks with Iran are progressing, Tehran has pushed back, keeping geopolitical risk firmly in play. Equity futures in the US and Europe have edged higher, but we’ve seen this kind of tentative Monday optimism fade quickly before. Meanwhile, the dollar is creeping higher again and bond yields are holding steady — neither of which typically helps gold.
With Brent crude still comfortably above $110, the inflation outlook is becoming more complicated. Markets have already been pushing back against any lingering expectations of rate cuts, with some floating the idea of further tightening. Normally, a stronger dollar and rising yields would weigh on gold, but for now, safe-haven demand linked to geopolitical tensions is helping to offset that pressure. Still, the market feels less convinced than it did a few months ago when gold’s rally looked almost one-directional.
From here, everything hinges on how the Middle East situation develops. If we start to see genuine signs of de-escalation and oil prices pull back, that could take some heat out of the dollar and give gold — along with broader risk assets — a bit more breathing room. But at the moment, that feels like a big “if.” Iran doesn’t seem in a rush to compromise, and elevated energy prices may well be part of its strategy.
Until there’s something more concrete on a ceasefire or diplomatic progress, any short-term moves against the prevailing trend should be treated with caution.
Read our longer-term gold forecast for Q2 and beyond HERE.
Technical gold forecast and key levels to watch
Gold looks like it’s trying to stabilise, but it’s hardly convincing just yet. After a rough couple of weeks, last week’s price action felt more like damage control than a true shift in sentiment. Yes, we saw a recovery from Monday’s drop, and holding above the $4400 level — the February low — is something bulls can point to. But that alone doesn’t signal a bottom.
The trend over the past couple of months still leans to the downside. Since peaking in January, rallies have struggled to gain traction, and there’s a clear stack of resistance levels overhead that could continue to cap any upside.
The first hurdle sits around $4700, and just above that, the $4750 area comes into play, where the 21-day EMA is now hovering. That $4700–$4750 zone looks like a real test for any short-term recovery. If gold can’t break through there, then this bounce risks fading just like the others we’ve seen recently.
Even if buyers manage to push higher, the $4800–$4840 region is another key barrier. It’s acted as both support and resistance before, so expect sellers to show up again. Only a clean break above that zone would start to shift the narrative and open the door towards the $5000 level.
On the downside, the $4400–$4500 range is doing the heavy lifting right now, but if that gives way on a daily close, the tone could quickly turn more bearish. In that scenario, a move back towards $4100 looks likely, where the 200-day moving average sits.
And if that level fails, then attention shifts to the bigger picture support around $4000 — a level that carries both technical and psychological weight.
So, while this gold forecast hints at a potential base forming, the reality is that gold isn’t out of the woods yet. For now, it feels like a market stuck between trying to bottom and still respecting a broader downtrend.
-- Written by Fawad Razaqzada, Market Analyst
Follow Fawad on Twitter @Trader_F_R
