Gold prices surged 1.7% on Monday, heading for extending gains for a second consecutive session, trading above the key level of $4500 per ounce.
Gold is currently trading above the weekly pivot point at $4398. It is worth noting that a break above the aforesaid pivot point could help prices regain their upward march, heading toward resistance levels of $4698 then $4902.
If gold fails to break above the weekly pivot point at $4398, it may test the first weekly support level at $4194. A sustained move below this level would be a negative signal that could intensify the selling pressure, opening the door for prices to retreat to the second support level of $3895.
In terms of geopolitical escalation, fighting intensified across the Middle East on Monday, as Iran reportedly launched projectiles targeting Israel and several Gulf nations.
The conflict, now entering its second month, has expanded further to draw in Iran-aligned Houthi forces in Yemen. Israel’s military reported intercepting drones launched from Yemen, heightening concerns over crude supply disruptions as the strategically vital Strait of Hormuz remains effectively closed.
At the same time, the Wall Street Journal has reported that President Trump is considering a potentially complex and risky military operation to remove almost 1,000 pounds of uranium from Iran.
Meanwhile, U.S. forces from the 31st Marine Expeditionary Unit have reportedly arrived in the Middle East, in a move seen as expanding President Trump’s strategic options as he weighs the next phase of the conflict. A Washington Post report indicated that the Pentagon is preparing for potential weeks-long ground operations in Iran.
Trump suggested that direct negotiations with Iran were ongoing and that a deal with Tehran could be close.
Speaking to reporters aboard Air Force One, Trump said negotiations were going “extremely well,” and that a deal with Iran was possible, touting “regime change” in Tehran after U.S. strikes killed several top Iranian officials in the past month.
From a fundamental perspective, Investors are gearing up for data this week that could offer some insight into how the war in Iran is impacting the wider U.S. economy.
A fresh gauge of manufacturing sector activity for March from the Institute for Supply Management is due on Wednesday, with Wall Street analysts predicting that the index will decline but stay in expansionary territory.
Finally, on Friday, the latest U.S. jobs report is scheduled to be released. Economists are expecting the U.S. to have added 56,000 roles in March, rebounding from a drop of 92,000 in February. The unemployment rate is also seen holding steady at 4.4%.