Gold Locked in Hormuz: Down and Where to Go!
Gold weakened after the US attack on the Strait of Hormuz dampened optimism that the shipping lane would soon be reopened through US-Iran negotiations. While the risk of energy supply disruptions has risen again, the market also assesses that inflation risks remain high, making gold's recovery more limited.
From a fundamental perspective, the main channel comes from energy. Brent reportedly rose more than 2% after the attack raised concerns about longer supply disruptions, and rising oil prices typically amplify inflationary pressures. At this point, gold faces a tug-of-war: support as a hedge against rising tensions, but pressure if inflation pushes interest rate expectations higher.
The interest rate narrative is once again dominant, as gold does not offer a yield. Since the conflict broke out in late February, gold has fallen about 14%, and the market briefly raised bets on rate hikes as energy surges and inflation expectations heated up. With the dollar trending slightly stronger, additional pressure on gold is also emerging, as gold is priced in dollars.
Technically, with gold trading at 4,535, the nearest technical level to monitor on the downside is 4,520–4,515 as initial support. If it breaks, the next focus shifts to 4,500 (psychological), then a potential continuation to 4,470–4,460. On the upside, the nearest resistance is at 4,550–4,560. If the price is able to break and hold above this zone, upside potential opens up to 4,585–4,600, with a further target of 4,630–4,650 if momentum strengthens. As long as the price remains below 4,550–4,560, the very short-term bias is toward consolidation with moderate downward pressure.
If pressure persists and the price fails to hold around this zone, the market typically interprets this as a signal that downward momentum is still active. Conversely, a bounce from this area would open up room for consolidation, but a more convincing recovery would still require more stable sentiment, especially if gold's correlation with risk assets remains strong.
For the next direction, the market will be monitoring three factors: developments in US-Iran negotiations and the security of Hormuz (whether they improve or become more compromised), the response to oil prices, which will determine inflationary pressures, and the movement of the dollar, which could strengthen or ease pressure on gold. (asd)
Source: Newsmaker.id
