GOLD turns south again as US-Iran tensions resurface

• Gold reverses previous rebound, drops back toward $4,500 early Tuesday as risk-aversion seeps back.
• The US Dollar attracts renewed haven bids after the US’s self-defence attacks in Iran cast doubts on the ceasefire.  
• Gold fails again below 21-day SMA resistance near $4,600, as bearish momentum persists.  

Gold has reversed Monday’s recovery, returning to the red below $4,550 early Tuesday, as markets turn risk-averse and flock back to safety in the US Dollar (USD).

The resurgent haven demand for the USD weighs heavily on Gold as the latest so-called self-defence strikes conducted by the United States (US) Central Command forces in southern Iran raise concerns about the sustainability of the fragile ceasefire between the US and Iran, reviving risk-off flows across financial markets.

On the other hand, US President Donald Trump lauded the ongoing peace talks with Iran, citing them as ‘going nicely’. However, Trump did not hesitate to warn of fresh attacks if those fail yet again.

With the US-Iran ceasefire appearing on tenterhooks amid persistent deadlock, Oil prices have caught a fresh bid in Asia this Tuesday, with WTI climbing back toward the $100 mark.

Resurfacing inflation concerns on renewed strength in Oil prices put hawkish expectations around the US Federal Reserve (Fed) back to the fore, exerting additional downside pressure on the non-yielding Gold.

Markets are expecting the Fed to hike interest rates by the end of this year, with the odds of such a move standing at a little over 50%, according to the CME Group’s FedWatch Tool.

On Monday, Gold staged an impressive turnaround toward $4,600 on fresh optimism that the US and Iran were close to signing a peace agreement to end the three-month-long war and reopen the Strait of Hormuz.

Looking ahead, markets will stay glued to any further developments on the US-Iran peace talks and the fray ceasefire, as the US economic calendar has little of note for bullion traders, barring the Consumer Confidence data.

Meanwhile, the Oil price action could also have a strong bearing on Gold’s movement in the upcoming sessions.

Daily technical analysis

In the daily chart, XAU/USD trades at $4,534.70, keeping a bearish near-term bias as spot holds beneath the short- and medium-term moving averages while clinging to a nearby trend-line pivot. Price sits below the 21-day simple moving average (SMA) at $4,601.30 and the 50-day SMA at $4,648.46, suggesting rallies remain capped for now, while the Relative Strength Index (14) around 43 hints at subdued, rather than extreme, downside momentum.

On the topside, initial resistance is located at the 21-day SMA near $4,601, followed by the 50-day SMA around $4,648, with the 100-day SMA much higher at $4,801.78 reinforcing the broader corrective tone. On the downside, the immediate focus is on the current pivot zone around $4,534; a clear break lower would expose the 200-day SMA at $4,388 as the next notable support, where the former falling wedge resistance converges.