Rebound Fails to Reverse Bearish Structure; Downside Risks Persist

Summary:

Escalating tensions between the U.S. and Iran have driven energy prices higher, reinforcing inflation expectations. Gold has fallen დაახლოებით 3% this week. Despite a short-term technical rebound that broke above the previous high, the broader structure remains under pressure amid rising rate hike expectations, with $4,657 acting as a key support level.

BUY XAUUSD

EXP

TRADING

4694.42

Entry Price

5100.00

4539.00

4709.07 +14.88 +0.32%

0.0

Pips

Flat

4539.00

Exit Price

4694.42

Entry Price

5100.00

Fundamentals

Gold prices remained below $4,700 on Friday, posting a weekly decline of around 3.0%. The primary driver has been escalating tensions between the U.S. and Iran over the Strait of Hormuz, which have pushed energy prices higher and intensified concerns about rising inflation.

Both sides continue to impose blockades on this strategically vital waterway, with limited progress in peace negotiations. U.S. President Donald Trump stated on Thursday via social media that he had ordered the U.S. Navy to strike and destroy any vessels laying mines in the Strait of Hormuz. Additionally, U.S. forces boarded a supertanker carrying Iranian oil in the Indian Ocean, signaling a further escalation in tensions.

Meanwhile, the ceasefire agreement between the U.S. and Iran has been extended indefinitely, with Washington awaiting a new formal proposal from Tehran. The ceasefire between Israel and Lebanon has also been extended by three weeks. Overall, while geopolitical risks in the Middle East have not spiraled out of control, uncertainty remains elevated.

Persistently high energy prices are amplifying inflationary pressures and strengthening expectations that major central banks will maintain tight policy or even raise rates further. In this context, gold’s appeal as a non-yielding asset is diminished, keeping prices under pressure.

Rebound Fails to Reverse Bearish Structure; Downside Risks Persist_1

Technical Analysis

Ahead of the New York session, the Trump administration extended transportation waivers related to the Jones Act by 90 days, aiming to facilitate the movement of oil, fuel, and fertilizers within the United States. The news briefly improved market sentiment, prompting a technical rebound in gold from a two-week low, although the broader bearish structure remains intact.

From a short-term perspective, the current rebound mirrors the strength seen ahead of the previous New York session, but with one key difference: this time, price has successfully broken above the prior high, whereas the previous attempt failed. This suggests improving short-term momentum.

If prices do not make a new low, $4,657 could serve as a short-term bottom for this correction. In that case, gold may extend its recovery toward the $5,000–$5,100 range. Conversely, a break below this support would keep the broader structure in a weak consolidation phase.

Trade Setup

Direction: Buy

Entry: 4686

Target: 5100

Stop Loss: 4539

Valid Until: 2026-05-21 23:55

Support: 4700, 4667, 4639

Resistance: 4773, 4798, 4833

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