US-Iran Ceasefire Eases Safe-Haven Demand; Gold Breaks Key Support as Markets Await Fed Policy Signals

Summary:

Spot gold initially advanced on Monday, supported by a sharp decline in oil prices and lower U.S. Treasury yields and the U.S. dollar. However, as expectations for a sustained ceasefire between the United States and Iran continued to strengthen, safe-haven demand faded. Gold subsequently erased all of its earlier gains and broke below key support levels. Market participants are now awaiting the Federal Reserve's interest rate decision and upcoming U.S. inflation data for fresh guidance on the outlook for monetary policy.

BUY XAUUSD

EXP

TRADING

4034.25

Entry Price

4398.00

3950.00

4022.28 -6.14 -0.15%

0.0

Pips

Flat

3950.00

Exit Price

4034.25

Entry Price

4398.00

Fundamentals

International oil prices fell sharply on Monday, easing concerns over renewed inflationary pressures and the prospect of further monetary tightening. The decline also weighed on the U.S. dollar and Treasury yields, helping gold strengthen during the Asian session.

However, as the suspension of hostilities between the United States and Iran continued to improve market risk sentiment, demand for safe-haven assets gradually weakened. Gold broke through several key support levels during the European and New York sessions and extended its decline into Tuesday, with prices now approaching the psychologically important $4,000 level.

Looking ahead, market attention will shift to the Federal Reserve's policy decision and the upcoming U.S. inflation data for further clues on the future path of interest rates. If Treasury yields remain subdued, gold is likely to continue finding support around current levels. However, any unexpectedly hawkish signals from the Fed could push the U.S. dollar and bond yields higher again, limiting the precious metal's near-term rebound potential.

US-Iran Ceasefire Eases Safe-Haven Demand; Gold Breaks Key Support as Markets Await Fed Policy Signals_1

Technical Analysis

From a technical perspective, gold's sharp late-session pullback on Monday was somewhat unexpected. The decline was primarily driven by the absence of fresh bullish catalysts, while easing safe-haven demand prompted short-term bulls to lock in profits. After breaking below the key $4,030 support level of the short-term uptrend, the technical outlook weakened noticeably, suggesting that gold is likely to enter a period of consolidation over the coming trading sessions.

That said, the market has not yet returned to a medium-term bearish trend. The key levels that will determine whether gold enters a new leg lower are not the psychological $4,000 mark, but the major support levels at $3,982 and $3,959. A decisive break below these levels could trigger additional stop-loss selling and open the door to deeper losses. Conversely, as long as gold holds above this support zone, the medium-term recovery structure is expected to remain intact.

Trading Strategy

Direction: Buy

Entry: 4,000

Target: 4,398

Stop Loss: 3,950

Strategy Valid Until: August 27, 2026, 23:55

Support: 3,982 / 3,959 / 3,900

Resistance: 4,055 / 4,074 / 4,116

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