Gold prices remain below the $4,000 psychological level, with the next major move likely to depend on US President Donald Trump's statements and developments surrounding potential military action against Iran. Despite declining US Treasury yields and a weaker US Dollar, gold continues to face selling pressure as concerns over technology stocks and geopolitical uncertainty drive volatile market conditions.
Interestingly, the 10-year US Treasury yield closed lower, followed by a decline in the US Dollar. Under normal circumstances, this combination would support gold prices by reducing the opportunity cost of holding a non-yielding asset.
However, the current market environment is more complicated. Concerns over the stock market, particularly technology companies linked to artificial intelligence (AI), have intensified selling pressure across the sector. As investors seek liquidity to offset or cover losses in equities, gold has also become vulnerable to liquidation despite its traditional safe-haven status.
Meanwhile, US government bonds have attracted safe-haven demand, while the US Dollar has also weakened. This divergence highlights the complexity of current market sentiment, where gold is struggling to benefit from traditionally supportive macroeconomic conditions.
Geopolitical Risks Continue to Weigh on Gold
Oil prices have climbed back toward $103 per barrel following reports of oil tankers catching fire in the Strait of Hormuz, with Iran once again coming under suspicion. However, concerns about a potential escalation have been partly offset by ongoing diplomatic efforts.
Meanwhile, reports indicate that Ukraine has halted attacks on Russian oil refineries after facing pressure from the United States last week. These developments could help balance geopolitical risks and, in isolation, may not necessarily create a significant new catalyst for gold prices.
Nevertheless, speculation is growing that President Trump could resume military operations against Iran. Over the past week, market discussions have focused on the possibility of US strikes following the midterm elections.
More recent reports have suggested that Trump has received briefings from military commanders and that the United States has informed its allies about the possibility of an attack on Friday or Saturday.
These unconfirmed reports have heightened geopolitical uncertainty and contributed to gold's decline below $4,000. Traders remain particularly sensitive to any developments that could signal an imminent escalation in the Middle East.
Watch Trump for Market Direction
With limited US economic data scheduled for release tonight, traders should pay close attention to Trump's statements, which could emerge at any time, particularly during the US evening session.
The market will focus on whether the reported plans for potential military action this week are confirmed or denied.
If Trump denies the reports and indicates that diplomatic negotiations remain ongoing, gold could stage a rebound during the evening session. In this scenario, traders may consider gradually rebuilding long positions while monitoring key resistance levels.
Conversely, if Trump confirms plans for further military action, gold could face renewed selling pressure. Traders may then consider bearish scenarios targeting critical support levels at $3,959 and $3,886.
However, market reactions will depend on the details of any announcement, the perceived likelihood of military action, and whether investors prioritize geopolitical safe-haven demand or liquidity needs.
Gold Technical Analysis
Daily Chart: Bearish Pressure Builds
The daily candlestick closed in bearish territory after gold failed to extend its gains above $4,068. Prices subsequently fell below the $4,000 psychological threshold, bringing the next nearby daily support zone at $3,959–$3,975 into focus.
During the latest trading session, the decline temporarily found support near $3,990, leaving prices relatively close to this critical support area.
Stronger-than-expected Personal Consumption Expenditures (PCE) inflation data had already limited gold's recovery potential, although prices initially managed to rebound above $4,000. The latest selling pressure has instead been driven largely by geopolitical concerns surrounding the possibility of US military action against Iran on Friday or Saturday.
A decisive break below $3,959 could expose the next downside targets at $3,900 and $3,886.
If military conflict escalates, gold could face additional volatility, including the risk of a lower weekly close or a downward opening gap when markets resume trading on Monday. Nevertheless, a confirmed escalation could also trigger renewed safe-haven buying, making the actual market response dependent on the balance between geopolitical demand and liquidity-driven selling.
On the other hand, if Trump rejects the reports and confirms that diplomatic negotiations are continuing, the $3,886–$3,900 area could serve as a potential downside reference zone before gold attempts a gradual recovery.
H4 Chart: Resistance at $4,011–$4,024
On the four-hour chart, gold has broken below the pink-marked support zone at $4,011–$4,024. Although prices have staged several rebound attempts, this area has repeatedly limited upward movement and is now an important resistance zone to monitor.
Any recovery toward $4,011–$4,024 could attract renewed selling interest if bearish momentum persists and geopolitical tensions continue to escalate.
In the short term, this zone represents a potential selling area for traders following a bearish strategy. However, the setup would require confirmation from price action and should not be treated as a guaranteed outcome.
A sustained move back above this resistance zone could weaken the immediate bearish outlook and open the door to a broader recovery.
Key Gold Price Levels to Watch
| Technical Level | Significance |
|---|---|
| $4,068 | Previous upside barrier |
| $4,011–$4,024 | H4 resistance zone and potential selling area |
| $4,000 | Psychological price level |
| $3,975–$3,959 | Key daily support zone |
| $3,900 | Intermediate downside target |
| $3,886 | Critical lower support target |
Trump Headlines Could Trigger Volatility
Gold remains under pressure below $4,000 as traders weigh geopolitical uncertainty, inflation concerns, and liquidity risks in the technology sector.
The immediate outlook will depend heavily on Trump's statements regarding Iran and the prospects for diplomatic negotiations. A denial of imminent military action could encourage a technical rebound, while confirmation of an escalation could intensify volatility and expose lower support levels.
From a technical perspective, the $4,011–$4,024 zone remains a key resistance area, while $3,959 is the immediate downside level to watch. A break below this support could expose $3,900 and $3,886.
Traders should remain cautious, monitor breaking geopolitical developments, and wait for price confirmation before committing to a directional strategy.