Gold prices fell slightly on Monday, as they continue to struggle to hold above the bearish channel’s middle line on the four-hour chart. If the yellow metal manages to stabilize above the channel’s middle line, it could rise toward resistance levels at $4548 and then $4579. On the downside, if the price fails to find positive momentum, it may test support levels near $4467 and then $4437.
Global markets remained focused on developments in the Middle East as investors awaited President Donald Trump’s decision on extending the U.S.-Iran ceasefire, while oil prices surged more than 2% following Israel’s expanded military operations in Lebanon. Meanwhile, the U.S. dollar rebounded from a two-week low as rising geopolitical tensions boosted demand for safe-haven assets and renewed concerns over global energy supplies.
Market Watch
Markets await Trump’s approval of an Iran ceasefire extension
Global financial markets remained cautious on Monday as investors awaited U.S. President Donald Trump’s decision on a proposed extension of the ceasefire agreement between the United States and Iran, a move that could have significant implications for energy markets, inflation expectations, and overall risk sentiment.
Reports indicate that U.S. and Iranian negotiators have reached a preliminary agreement to extend the current ceasefire for an additional 60 days, while also advancing discussions on broader issues including maritime security in the Strait of Hormuz and Iran’s nuclear activities. However, the proposal still requires final approval from President Trump before it can be formally implemented.
The uncertainty surrounding the decision has kept traders on edge. Oil prices rose as investors monitored the situation closely, reflecting concerns that any setback in negotiations could threaten energy supplies through the Strait of Hormuz, one of the world’s most important oil shipping routes. At the same time, the U.S. dollar remained relatively firm as markets balanced geopolitical risks against expectations for future Federal Reserve policy.
Recent military exchanges between the United States and Iran have underscored the fragile nature of the current truce. Despite ongoing diplomatic efforts, both sides continue to face significant disagreements on key issues, leaving investors focused on whether the proposed extension will receive final approval in the coming days.
Analysts say a successful extension of the ceasefire could help stabilize oil markets and improve investor confidence, while any delay or rejection could renew volatility across commodities, currencies, and global equities.
Oil rises over 2% as Israel steps up incursion into Lebanon
Oil prices climbed more than 2% on Monday as escalating military operations by Israel in southern Lebanon heightened concerns over potential disruptions to energy supplies from the Middle East.
Brent crude futures rose above $93 per barrel, while U.S. West Texas Intermediate (WTI) crude approached $90 per barrel during early trading. The gains came after Israel ordered troops to advance further into Lebanon in its ongoing conflict with the Iran-backed Hezbollah group, despite a ceasefire that had been in place for more than six weeks.
The renewed fighting has increased fears that tensions across the region could intensify further, undermining diplomatic efforts aimed at extending the broader ceasefire between the United States and Iran. Investors are closely monitoring developments, as any deterioration in regional stability could threaten oil shipments through the Strait of Hormuz, a critical route that carries roughly one-fifth of global oil and gas supplies.
Market sentiment was also affected by reports that Iran had increased naval mine deployments near the Strait of Hormuz, raising concerns that the reopening of the strategic waterway could face additional delays even if diplomatic progress is achieved.
Analysts noted that geopolitical risks are currently outweighing weaker economic indicators from China, where recent data pointed to slowing factory activity and softer demand growth. As a result, energy traders remain focused on the possibility of supply disruptions rather than concerns about global consumption.
The latest escalation in Lebanon marks one of the most significant spillovers from the broader regional conflict involving Iran, Israel, and U.S. forces, keeping commodity markets highly sensitive to political and military developments across the Middle East.
Dollar rebounds from a two-week low
The U.S. dollar rebounded on Monday after falling to a two-week low in the previous session, supported by renewed geopolitical tensions in the Middle East and rising expectations that the Federal Reserve may need to keep interest rates elevated for longer.
The dollar index, which measures the greenback against a basket of major currencies, edged higher after investors moved back into safe-haven assets following fresh military exchanges between the United States and Iran, alongside escalating clashes between Israel and Hezbollah in Lebanon.
Market sentiment shifted after optimism surrounding a possible U.S.-Iran ceasefire extension gave way to concerns that negotiations could face delays. The uncertainty boosted demand for the dollar, helping it recover from Friday’s decline, when hopes for diplomatic progress had weakened the currency.
At the same time, rising oil prices added to inflation concerns, reinforcing expectations that the Federal Reserve could maintain a restrictive monetary policy stance. Higher energy costs have prompted investors to reassess earlier expectations for interest rate cuts later this year.
Analysts noted that the dollar’s rebound was also supported by higher U.S. Treasury yields, while traders remained focused on upcoming U.S. labor market data and comments from Federal Reserve officials for further signals on the path of monetary policy.
Despite the recovery, currency markets remain highly sensitive to developments in the Middle East, with investors closely watching negotiations between Washington and Tehran, as well as the broader regional security situation.
Looking Ahead
Markets are awaiting the release of the U.S. ISM Manufacturing PMI later today for fresh insights into the health of the manufacturing sector and the broader economy. Investors will closely monitor the data for signs of improving business activity, new orders, and employment trends, as the report could influence expectations for Federal Reserve policy. A stronger-than-expected reading may support the U.S. dollar and Treasury yields, while a weaker result could reinforce expectations of future interest rate cuts and weigh on the greenback.