XAU/USD eyes $4,000 as Hormuz closure lifts Oil prices, inflation fears

• Gold loses $4,100 early Monday, extending the previous weekly loss amid renewed US-Iran strikes.
• The US Dollar jumps as the Hormuz closure boosts Oil prices, following the Fed’s inflation warning.
• Gold’s daily technical setup retains a bearish bias whilst below the 21-day SMA; RSI below 50.

Gold is deep in the red early Monday, having lost the $4,100 level, as tensions in the Middle East reignite, reversing Friday's rebound.

Gold sellers retain total control at the start of a new week as the US Dollar (USD) rebounds on the latest upsurge in Oil prices and the revival of inflation fears, which double down on hawkish expectations around the US Federal Reserve (Fed).

This comes on the back of renewed hostilities in the Middle East and the Iranian closure of the Strait of Hormuz, following the United States’ (US) additional strikes against Iran on Sunday.

In response, Tehran targeted US facilities in states across the Gulf on Sunday and said it had again closed the vital Strait of Hormuz.

Inflation fears also increased after the Fed warned about it in its semi-annual Monetary Policy Report (MPR) released on Friday.

The Fed report stated: “US inflation "stepped up further this spring" as the evolving impact of tariffs, a war-related rise in energy costs, and the booming artificial intelligence buildout boosted price pressures that took root last year.”

Gold traders further remain on the back foot ahead of the US Consumer Price Index (CPI) data release and new Fed Chair Kevin Warsh's first semi-annual testimony before Congress on Tuesday.

In the meantime, markets will closely follow the developments in the US-Iran war and the Oil price movement for fresh trading incentives.

Technically, downside risks remain intact for the bright metal amid a bearish daily setup, explained below.

In the daily chart, XAU/USD trades at $4,069.42, keeping a bearish near-term tone as it holds below the 21-day simple moving average (SMA) at $4,128.29 and the 50-day SMA at $4,343.88. The broader backdrop remains heavy with the 200-day SMA at $4,494.71 and the 100-day SMA at $4,583.07 still well above spot, while the Relative Strength Index (RSI) around 41.2 hints at weak but stabilizing downside momentum rather than outright oversold conditions.

On the topside, initial resistance comes at the 21-day SMA near $4,128, with further barriers at the 50-day SMA around $4,344 and then the 200-day SMA at $4,495 before the longer-term cap at the 100-day SMA close to $4,583. With no nearby moving-average support below price in this dataset, any recovery remains vulnerable while XAU/USD trades beneath this layered resistance stack, and a failure to reclaim the 21-day SMA would keep the risk skewed toward renewed downside probes.