$4,100 Support Holds, but Gold's Upside Awaits US-Iran Mediation
Market Drivers
The 10-year US Treasury yield closed higher again, supporting further US dollar strength. This trend continued throughout Monday's trading session, making it difficult for gold to recover as the precious metal extended its decline toward $4,110.
Meanwhile, the latest US Treasury auction results showed relatively weak demand for government bonds, reinforcing concerns over soft demand for US Treasuries. This also contributed to the continued rise in Treasury yields.
Trump Denies Iran Sanctions Relief Offer
The reports were published by two international media outlets, Al Jazeera and Axios, citing the same source. The reports said the US and Iran had continued positive discussions, with Iran reportedly showing flexibility regarding its nuclear program. However, the two sides remained divided over which party should take the first step.
A second report claimed that President Donald Trump was willing to provide sanctions relief to Iran and release frozen funds in exchange for concrete progress on the nuclear issue.
CNN later published a similar report, citing a US official who reportedly said Trump was willing to consider sanctions relief and the release of frozen Iranian funds.
However, Trump denied the reports, calling the information "hoax" and demanding that Axios retract its report. Hopes for de-escalation subsequently faded, putting renewed pressure on gold and pushing prices back toward $4,110.
Nevertheless, mediation efforts remain ongoing, with mediators continuing to act as a channel for proposals between the two sides. Iranian Foreign Minister Abbas Araghchi said Iran had already conveyed its demands through Qatar, with an official US response expected to be delivered through the mediator by Tuesday local time at the latest, potentially Tuesday night or early Wednesday in Indonesia.
Key Focus Tonight
The US Consumer Confidence Index and JOLTS Job Openings data are scheduled for release at 21:00 WIB. If the data come in stronger than expected, gold could face renewed downside pressure. Conversely, weaker-than-expected economic data could create room for a rebound in gold prices.
However, the key event that markets are closely watching is the US response to Iran's demands through Qatari mediation. Traders will be looking for signs of whether the diplomatic process can move forward.
If no agreement is reached and Trump continues to reject Iran's proposal, gold could remain under pressure, with the $4,020 and $3,965 zones potentially coming into focus. On the other hand, signs of an agreement—or at least an indication that negotiations could continue into another round—could provide room for a gold rebound.
Gold Technical Analysis
On the daily chart, gold closed with a bearish candle featuring a long real body as selling pressure continued toward $4,110 following a gap-down opening. Gold fell from around $4,266 to $4,110 during the session.
From a technical perspective, downside pressure could remain dominant in the near term. However, the possibility of a technical rebound remains open as long as the $4,100-$4,120 support zone, highlighted in the previous analysis, remains intact.
Even so, any rebound is expected to remain relatively limited unless stronger bullish catalysts emerge. Weaker economic data and progress in US-Iran mediation could become the main drivers for a recovery. Conversely, unexpectedly strong economic data combined with stalled mediation could trigger renewed selling pressure, potentially sending gold toward the $4,040-$4,060 zone or even the $3,965 area.
H4 Technical Outlook
On the H4 chart, selling pressure continued after gold broke below two support zones: the green $4,229-$4,259 area and the brown $4,179-$4,203 area. Both zones have now turned into potential resistance.
Technically, further downside remains possible, with the next potential target located around the pink $4,019-$4,049 zone.
Previously, selling pressure stalled around $4,110, which is close to the $4,100-$4,120 zone that had been identified as psychological support and a potential buying area. At the time of writing, the intraday low remained at $4,113 before gold rebounded toward $4,140.
This suggests that the support zone is still holding in line with the previous expectation that a technical rebound could develop, particularly as the RSI had entered oversold territory.
The latest candle closed bullish, while gold continued attempting to recover. The RSI has also moved back above 30 after previously entering oversold territory below that level.
If the low remains at $4,113 over the next two to three hours and the swing low does not form a new lower low, the technical rebound scenario could remain viable. Traders may therefore consider a buy strategy to capture a potential short-term rebound, provided the technical conditions remain supportive.
However, the upside target is expected to remain limited. The nearest rebound could face resistance in the brown $4,179-$4,203 zone, while a stronger recovery could extend toward the green $4,229-$4,259 area.
During the New York session, these zones could become potential selling areas if the economic data come in stronger than expected. Conversely, if the data are weaker than expected and gold breaks through these resistance zones, traders could consider maintaining the buy position while monitoring momentum.
If gold reaches either the brown or green resistance zone before the economic data are released, particularly during the European session, traders may consider exiting buy positions and waiting for a reversal candle before looking for a sell setup.
A renewed decline could then retest $4,110 or move even lower if selling pressure intensifies.
Trading Scenarios
The primary scenario remains focused on selling while the market awaits greater clarity on US-Iran mediation, independent of the upcoming economic data.
A successful mediation process could provide a catalyst for a stronger gold rebound, while a failure in negotiations could reinforce selling pressure.
At the same time, traders can still consider a technical rebound strategy after a sharp sell-off. The setup remains consistent with the conditions highlighted in the previous analysis: a reversal candle, an RSI reading below 30 indicating oversold conditions, and execution once the market begins to stabilize after heavy selling.
This strategy remains valid as long as the $4,100-$4,120 support zone holds. A stop-loss could be placed below $4,110, although positioning it below the psychological $4,100 level would provide greater room against short-term volatility.
For sell setups, downside pressure could remain dominant if a rebound stalls in the gray $4,161-$4,183 zone, which previously acted as support. If this area is reached before the economic data are released, traders could consider placing a stop-loss above $4,183 to account for the possibility of a stronger technical rebound.
If the bearish scenario plays out, gold could retest the $4,100-$4,120 support zone and potentially break below $4,100.