Gold prices opened the week with a downward gap but rebounded after hitting a one-week low of $4736 per ounce.
Gold is currently trading above the weekly pivot point at $4789. It is worth noting that if the price remains above this level, it could resume its key uptrend, heading toward resistance levels at $4934 then $5036.
If gold fails to hold above the weekly pivot point at $4789, it may test the first weekly support level at $4687, a break below this level would be a negative signal that could intensify selling pressure, paving the way for prices to decline toward the second support level at $4542.
In terms of geopolitical escalation, developments in the war between the U.S. and Iran will likely dominate the debate in markets this week.
Uncertainty clouded the durability of a temporary ceasefire on Monday after the United States seized an Iranian-flagged vessel attempting to breach its maritime blockade over the weekend.
A two-week ceasefire is due to expire later this week, with President Trump stating that U.S. envoys will travel to Pakistan for a new round of peace talks with Iran.
However, Iran has declined to take part in a second round of negotiations, citing what it described as “excessive demands” and inconsistent positions from Washington, according to the state news agency IRNA.
Tehran said its decision was driven by “unrealistic expectations,” “shifting positions,” and “repeated contradictions” from the United States, in addition to the ongoing blockade, which it views as a breach of the ceasefire. Axios also reported that Iran suspects Washington may be preparing a surprise attack.
Meanwhile, attention on Tuesday will turn to the outlook for interest rates, as Kevin Warsh, President Trump’s nominee for Federal Reserve chair, is set to testify before Congress.
Lawmakers face a tight timeline to confirm Kevin Warsh as the successor to current Federal Reserve Chair Jerome Powell, whose term is set to expire in less than a month.
Warsh’s outlook for interest rates in the months ahead will be closely watched, especially after Powell’s prolonged standoff with President Trump over calls for deep and aggressive rate cuts to support the economy. Powell has resisted such pressure, emphasizing the Fed’s independence in setting monetary policy.
However, with the Iran conflict already exerting upward pressure on inflation, it remains uncertain how Warsh would navigate borrowing costs amid potential political influence. Markets have largely priced out the possibility of any rate cuts this year.
From a fundamental perspective, markets will also pay close attention to the U.S. service and manufacturing PMI reports for April.
Finally, investors are awaiting the release of U.S. core retail sales data for March, with analysts expecting a rise of about 1.3%, compared with the previous reading of 0.5%.