Gold ignores the recent macro playbook

• Gold resilience stands out against a hawkish Fed backdrop
• Potential US-Iran peace deal fuels fresh crude weakness
• Bulls need a break above $4,220 to build conviction

A notable shift in behaviour

The US dollar is firmer, front-end Treasury yields are higher and Fed funds futures are pricing close to two full rate hikes over the next year. Yet gold is managing to catch a bid. One day doesn't make a trend, but it's a notable departure from the price action that's dominated in recent weeks.

Connecting the dots

Perhaps the reversal lower in crude prices following the positive news flow out of Switzerland on Sunday has something to do with it. Crude had been trading higher earlier in the session amid concerns the talks would disintegrate before reversing sharply lower as reports emerged that US and Iranian negotiators had agreed to continue working towards a broader peace agreement, including steps to keep energy supplies flowing through the Strait of Hormuz.

That may be relevant given speculation recently that some Gulf states were forced to liquidate bullion holdings to offset lost crude revenues and plug budget gaps, while other nations sold gold to fund energy purchases as prices surged.

If the worst of the energy disruptions have passed, it's conceivable some of those flows may be starting to reverse. It's impossible to know and highly speculative, but it may help explain why gold is proving more resilient than usual macro relationships would suggest.

Bears haven't packed up and left

Source: TradingView

While the longer-term view still favours selling into strength, in the near term we've seen a higher low print and the oscillators are starting to turn higher. It’s not yet a bullish signal, but it suggests some of the downside momentum evident earlier this month is beginning to fade.

Of course, traders should question the price action seen late last week given the Juneteenth public holiday in the United States. Volumes were weak, immediately raising question marks over the validity of the bounce. However, we've seen an extension of the move in Asia today, giving it a little more credibility.

Looking at the four-hour chart, $4,220 is the immediate focus overhead. The price kissed it earlier today before retreating, indicating bears have not packed up and left just yet.

Should that change, a break above $4,220 would bring $4,320 and $4,367 into play, both having acted as support and resistance earlier this month. Beyond that, the downtrend from the March high kicks in around $4,400 per ounce.

On the downside, $4,122 remains the focal point, marking the low struck late last week. A break would put the June 11 swing low at $4,025 into focus, followed by the psychologically important $4,000 per ounce level.

Rather than maintain a strong directional bias, I'd be inclined to take my cues from the price action in the prevailing $4122-4220 range. Whether gold remains trapped within it or breaks in either direction may provide a clearer steer on where the next meaningful move may lie.