Downside risks continue to weigh on gold prices, while geopolitical developments remain the key factor shaping market sentiment.
The US 10-year Treasury yield remained unavailable on Wednesday due to the Veterans Day holiday, leaving financial markets relatively stable from the Asian session through the early New York session. However, the US Dollar continued to strengthen, preventing gold's technical rebound during the Asian and European sessions from gaining momentum. As a result, gold eventually gave up its gains and closed below the $4,000 level for the first time since its November 4, 2026 rally.
Oil Prices Remain Stable
The positive development is that crude oil prices have remained relatively stable. WTI crude initially rebounded toward $88 per barrel before retreating and settling around the $86 level. This offers some relief to markets that had been concerned that Iran's rejection of Trump's claims could reignite tensions and trigger another surge in oil prices.
However, that scenario has not materialized so far, with oil prices holding within the $85–$87 range through Thursday morning.
Russian negotiators have also signaled progress toward a potential peace agreement with Ukraine, although significant disagreements remain. This has helped ease some concerns surrounding oil market volatility.
Meanwhile, Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, continues to pressure Washington to respond to Tehran's demands before proceeding with further negotiations, including the reopening of the Strait of Hormuz.
Markets are likely to remain sensitive to both positive and negative geopolitical headlines, particularly developments involving the United States and Iran. There has been no significant breakthrough in mediation efforts, although one encouraging factor is that Trump appears to be prioritizing diplomacy over military action for now.
US-Iran Diplomacy Remains Critical
Recent reports indicate that Trump has authorized US Vice President JD Vance to continue mediation efforts. Vance is reportedly more inclined toward direct, face-to-face negotiations with Ghalibaf, Iran's senior security leader.
This suggests a strong willingness on Vance's part to bring the conflict to an end, a development that markets may interpret as a positive signal for geopolitical stability.
However, the situation remains far from certain.
Reports have emerged that Trump and Israeli Prime Minister Benjamin Netanyahu had a disagreement during a phone conversation over the next steps regarding Iran. Netanyahu reportedly favors continuing military operations, while Trump is emphasizing diplomacy over further escalation.
Rumors also suggest that Netanyahu has instructed his cabinet to prepare for the possibility of another attack against Iran. These reports remain unconfirmed and require further verification.
Nevertheless, markets should remain particularly cautious. If another military strike occurs, oil prices could surge sharply, potentially triggering renewed inflation concerns. Gold could initially experience a rapid decline as markets reassess the implications for Federal Reserve policy.
However, any oil price spike could prove short-lived if diplomatic efforts resume, potentially allowing gold to recover from its initial selling pressure.
US Economic Data in Focus
The US Initial Jobless Claims report, scheduled for 20:30 WIB, and Existing Home Sales data at 22:00 WIB will be the next major economic releases for traders to monitor.
Weekly jobless claims have shown an improving trend over the past two weeks, potentially providing additional support for the US Dollar if the latest figures reinforce labor market resilience.
However, Existing Home Sales should not be overlooked. The inflation data released two days ago indicated that housing-related costs, rather than energy alone, contributed to persistent price pressures.
Consequently, stronger-than-expected housing data could reinforce concerns about inflation remaining elevated and put further pressure on gold. Conversely, weaker data could ease monetary tightening expectations and provide room for a technical rebound.
For now, the geopolitical outlook remains centered on two possible scenarios: military escalation or diplomacy. Although no agreement has emerged, the continuation of mediation efforts remains an important factor for financial markets.
Ongoing diplomatic negotiations are helping stabilize market sentiment and could prevent gold from experiencing a deeper decline. However, an actual agreement would be a much stronger catalyst for a sustained gold rally.
On the other hand, renewed military action could weigh heavily on market sentiment by triggering fears of another oil price surge. This could revive inflation concerns and increase the likelihood that the Federal Reserve will consider further interest rate increases beyond December.
Such a scenario would create additional downside pressure on gold, potentially opening the door for a break below the $3,870 level.
Gold Technical Analysis
The daily gold candlestick chart has closed bearish for two consecutive sessions. During the latest session, selling pressure pushed prices down to $3,982, a lower level than the previous day's low.
Although gold briefly rebounded toward $4,066, the recovery proved fragile and eventually reversed, sending prices back below the psychological $4,000 threshold.
Technically, the decline has brought gold back into its daily support zone between $3,971 and $4,057. This area could potentially attract buying interest and trigger another rebound.
However, the risk of a further decline below $3,960 remains significant.
From a fundamental perspective, gold continues to face pressure from the possibility of an aggressive 50-basis-point Fed rate hike and persistent uncertainty surrounding the Middle East.
On the other hand, optimism over a potential diplomatic agreement and the absence of any confirmed US military attack plans against Iran could help limit further losses in the near term.
As a result, the $3,971–$4,057 range is expected to remain an important trading zone, although a break below $3,960 would increase the likelihood of a deeper correction toward $3,870–$3,886.
For the bullish outlook to regain strength, gold needs to recover above $4,057. A stronger bullish signal would emerge if prices manage to break above $4,067.
Key Gold Price Levels:
Support: $3,971, $3,960, $3,886, and $3,870.
Resistance: $4,057, $4,066, and $4,067.
Bullish scenario: A sustained recovery above $4,057, followed by a breakout above $4,067.
Bearish scenario: A break below $3,960 could expose gold to further losses toward $3,870–$3,886.
Overall, gold remains vulnerable to further downside pressure as long as the US Dollar stays firm and expectations of aggressive Fed tightening persist. Nevertheless, geopolitical developments, particularly progress toward a US-Iran diplomatic agreement, could become the decisive factor in determining whether gold stabilizes or extends its decline.