Gold prices opened the week with a downward gap, hitting their lowest level in about a week at $4,644, but recovered after gaining some positive momentum.
Gold is currently trading below the weekly pivot point depicted at $4736, where a break above could help prices hit the first weekly resistance level of $4871, which, if breached, would pave the way for further gains toward the second resistance level of $4993.
If gold fails to break through the weekly pivot point, it may retreat to test the first support level of $4614. A break below this level would be a negative signal, as it may send prices down toward the second support level of $4479.
In terms of geopolitical escalation, the U.S. military said it will begin a naval blockade of maritime traffic to and from Iranian ports on Monday at 10 a.m. Eastern Time, following an order from President Donald Trump after failed weekend negotiations with Iran.
However, the Pentagon noted that ships moving through the strait that are not destined for or departing from Iranian ports will be allowed to sail.
The 21-hour negotiations between the United States and Iran concluded without reaching an agreement, with Vice President JD Vance, who led the American delegation, stating that Iran refused to accept U.S. demands to refrain from developing a nuclear weapon.
Iran did not immediately comment on the talks, while Pakistan — acting as a mediator — emphasized that both sides must “uphold their commitment to the ceasefire.”
From a fundamental perspective, investors will have the opportunity this week to analyze more inflation data, including the U.S. Producer Price Index for March.
Last week, U.S. consumer prices accelerated sharply in March, largely driven by a spike in energy costs due to the Iran war, although the increase had been widely anticipated by markets.
Finally, eyes will focus on the U.S. jobless claims data, which is expected to show a fall to 215,000 from a previous of 219,000. If the data comes in higher than expected, it could raise concerns about the health of the labor market, while the opposite is true.