Gold market don see serious wahala last week. Even with geopolitical tension dey hot, gold still sell off. Dat one tell you wetin dey drive this market now: crude oil and inflation.
Crude oil rally hard on supply fear and shipping route risk. Once oil start to move, inflation expectation follow am. Traders wey dey position for rate cut don begin reconsider. Higher-for-longer come back on the table fast, and gold catch the full weight of dat repositioning.
Treasury yields climb as inflation expectation reset. US Dollar Index strengthen. Dem two things dey work together na bad combination for gold. Non-yielding asset, rising opportunity cost, stronger dollar making am more expensive overseas.
Selling pressure dey steady all week. Nothing for price action suggest say funds dey buy the dip. Dem dey reduce exposure. Gold try to stabilize late week but upside no dey. No conviction, no follow through, no push back to prior highs.
When gold no fit rally with dis level of geopolitical risk, the rate narrative don win the argument. Dat na the tell. Oil dey run this trade. As long as crude stay firm, inflation expectation stay elevated, yields dey supported, and dollar dey strong.
Dat na no setup wey you wan buy gold into rallies. If oil break or Fed pivot back toward cuts, picture go change quick. Until one of dem happen, treat bounces in June gold futures as selling opportunity.
Silver also dey under pressure. E trade below $76 on Monday, holding losses from last week. Attempts to revive US-Iran peace negotiation falter, and Strait of Hormuz remain effectively closed. Dat heighten concern over persistent inflation.
US President Donald Trump cancel planned trip by top envoys to resume talks with Iran for Islamabad. Tehran reiterate say dem no go engage under threats or blockade. Oil prices rally as Middle East conflict enter ninth week.
IEA characterize dis as the largest energy supply shock on record. Elevated inflation risk strengthen expectation say central banks fit keep rates higher for longer or even tighten further. Dat dey weigh on non-yielding precious metals.
US Federal Reserve expected to proceed cautious, with gradual rate cuts anticipated under incoming Chair Kevin Warsh.
Meanwhile, gold retain positive bias above $4,700 heading into European session on Monday, but e lack bullish follow-through. Reports say Iran give US new proposal on reopening Strait of Hormuz and ending war, with nuclear negotiations postponed.
Dis revive hopes for US-Iran peace talks and undermine US Dollar reserve currency status, wey act as tailwind for gold. Optimism exert downward pressure on crude oil prices and ease inflationary concern, leaving door open for at least one 25-basis-point rate cut by Fed in 2026.
Dat turn out to be another factor wey dey weigh on Greenback and benefit non-yielding gold. However, combination of factors fit hold back traders from placing aggressive bullish bets on XAU/USD and keep lid on any meaningful appreciating move.
Traffic through Strait of Hormuz remain largely blocked due to Iran restrictions on movement and US naval blockade of Iranian ports. Furthermore, Israeli Prime Minister Benjamin Netanyahu say he don order military to vigorously attack Hezbollah targets for Lebanon.
Dis keep geopolitical risk in play, wey go limit losses for crude oil prices and safe-haven USD. Traders also dey reluctant and opt to move to sidelines ahead of crucial two-day FOMC policy meeting, starting Tuesday.
Investors go look for more clues about Fed policy path amid sticky inflation and resilient US economic activity. Outlook go play key role in driving USD demand. Apart from dis, developments surrounding US-Iran saga go contribute to infuse volatility and provide some meaningful impetus to XAU/USD.
Meanwhile, gold premiums for India climb to highest in over two-and-a-half months last week due to limited supplies. Moreover, bullion trade at premiums of $9 to $12 an ounce for China, up from previous week premium of $3 to $6 amid some renewed physical demand and fresh buying interest.
Dis back the case for further upside for XAU/USD and suggest say intraday slides dey more likely to be bought into and remain limited.
From technical perspective, precious metal don dey consolidate for familiar range since beginning of dis month. Dis come on top of solid rebound from very important 200-day Simple Moving Average, tested for March, and suggest say broader uptrend remain intact, even as momentum cool.
Relative Strength Index dey hover near neutral 47, and Moving Average Convergence Divergence indicator dey show only modest positive readings. Dis hint at waning upside pressure rather than decisive reversal, suggesting period of sideways-to-soft consolidation before clearer directional move emerge.
Meanwhile, weakness back below $4,700 fit continue to find decent support and attract fresh buyers near lower boundary of month-to-date range, around $4,650-$4,645 region. Convincing break below fit prompt aggressive technical selling and pave way for deeper losses.
On upside, $4,750 area fit act as immediate hurdle ahead of $4,800 mark and $4,860-$4,865 region. Latter represent top end of trading range, wey if e clear decisively, go be fresh trigger for bullish traders and set stage for further appreciating move beyond $5,000 psychological mark.
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