Gold Climbs as Dollar Weakness Offsets Iran Peace Optimism

Traders' Opinions

Summary:

Gold rose nearly 3% to a one-week high above $4,340 as a weaker US Dollar and lingering geopolitical uncertainty outweighed improving sentiment following a framework peace agreement between the United States and Iran.

BUY XAUUSD

EXP

TRADING

4329.96

Entry Price

4560.00

4180.00

4340.39 +120.77 +2.86%

0.0

Pips

Flat

4180.00

Exit Price

4329.96

Entry Price

4560.00

Gold prices rallied sharply on Monday, with XAU/USD climbing to around $4,340 and extending its rebound from last week's lows near $4,024. The move comes as investors weigh the implications of a newly announced framework agreement between the United States and Iran while positioning ahead of a critical Federal Reserve meeting.

Market sentiment improved after Washington and Tehran confirmed progress toward a peace deal that includes reopening the Strait of Hormuz and extending the ceasefire that has been in place since April. The development boosted global equity markets and pressured crude oil prices as traders anticipated a normalization of energy supplies.

Despite the risk-on mood, gold remained well supported by a weaker US Dollar. The US Dollar Index slipped toward 99.50, enhancing the appeal of bullion for overseas investors and helping sustain upward momentum in the precious metal.

Attention is now turning to upcoming US economic releases and this week's Federal Reserve policy decision. Investors are looking for clues on the future path of interest rates, with any signs of slowing economic activity likely to support gold further.

In my view, gold's ability to rally despite improving geopolitical sentiment highlights the market's growing focus on Federal Reserve policy and Dollar weakness. While the Iran agreement has reduced some uncertainty, unresolved regional tensions and expectations surrounding US monetary policy should continue to provide support for bullion in the near term.

Technical Analysis

Price action has been characterized by a sequence of lower highs and lower lows since the mid-May peak, confirming that sellers continue to control the broader trend. However, following the aggressive selloff into the 4,080 support zone, gold has staged a strong relief rally and is currently attempting to reclaim the 4,300–4,320 resistance area, which previously acted as support before the recent breakdown.

The recovery from the 4,080 low appears corrective rather than impulsive at this stage. While buyers have successfully defended the major support zone around 4,080–4,100, price remains below several key horizontal resistance levels that define the prevailing downtrend. The immediate resistance is located around 4,300–4,320, where the market is currently stalling. A successful break and close above this zone would open the door for a move toward 4,440, which represents the next major supply area and previous support-turned-resistance.

Above 4,440, additional resistance is seen near 4,560, followed by the more significant barriers at 4,650 and 4,770. These levels correspond to previous swing highs and major consolidation zones where sellers repeatedly entered the market. A sustained move above 4,560 would be the first indication that bearish momentum is weakening materially and that a broader recovery phase may be developing.

On the downside, the 4,280–4,300 region now serves as the first layer of support. A failure to hold this area would suggest that the recent rally is losing momentum and could trigger renewed selling pressure toward 4,200. Below that, the critical support remains the recent swing low around 4,080. A decisive break beneath this level would confirm continuation of the broader bearish trend and expose psychological support at 4,000, with potential extension toward lower levels as sellers regain control.

From a market structure perspective, the recent rebound resembles a retest of broken support rather than a confirmed trend reversal. The sharp recovery from oversold conditions indicates aggressive short-covering and bargain hunting, but buyers still need to reclaim multiple resistance layers before a sustainable bullish outlook can be justified. Until then, rallies into resistance are likely to attract selling interest.

Although momentum indicators are not displayed on the chart, price action suggests short-term bullish momentum following the sharp recovery from 4,080. However, the broader trend remains bearish while price trades below the 4,440–4,560 resistance cluster. This implies that the current move may be a corrective bounce within a larger downtrend rather than the beginning of a new bullish leg.

TRADE RECOMMENDATION

BUY GOLD

ENTRY PRICE: 4,330

STOP LOSS: 4,180

TAKE PROFIT: 4,560

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