Gold prices opened the week with a bullish gap, rising 3% and heading toward extending gains for the third consecutive session.
The yellow metal is currently trading near the first weekly resistance level at $4380, breaking above may help prices to resume their upward march, with the next resistance level at $4541 as the target.
If gold fails to break through the first weekly resistance level at $4380, it will retest the weekly pivot point at $4202; a break below this level would be a negative signal that could open the door for prices to decline toward the weekly support levels near $4040 then $3862.
In terms of geopolitical tension, the U.S. and Iran have reached an interim peace deal that would end a war that has dragged on for more than three months.
A memorandum of understanding is due to be signed in Switzerland on Friday, according to Pakistan, which has served as a frequent mediator during the conflict.
Pakistani Prime Minister Shehbaz Sharif said the two nations have “declared the immediate and permanent termination of military operations on all fronts.” That includes Lebanon, Sharif said. Concerns had surrounded the outlook for the deal after Israel carried out attacks on Iran-backed Hezbollah militia in Lebanon over the weekend, leading to a stern rebuke of Israeli Prime Minister Benjamin Netanyahu by President Donald Trump.
Neither the U.S. nor Iran has offered specific details, while Tehran has indicated that the deal will not be implemented until it is signed.
Trump said that the agreement would halt hostilities and unblock the Strait of Hormuz.
In a social media post, Trump claimed the strait would be reopened on Friday, saying the delay was due to mine-clearing operations. He added that a longstanding American naval blockade of Iranian ports would be lifted as well.
From a fundamental perspective, the Federal Reserve will top the agenda, and it is widely expected to keep interest rates unchanged at its meeting on Wednesday.
Bets have grown that the Fed will keep rates steady this week, and possibly opt to lift borrowing costs later in 2026. Meanwhile, wagers at the beginning of the year that the Fed would embark of rate cuts have been all but eliminated, especially after recent data points showed an acceleration in inflation.
It’s still very likely that the easing bias will be removed from the FOMC statement,” analysts at Vital Knowledge said in a note, referring to the rate-setting Federal Open Market Committee.
But they argued that new Fed Chair Kevin Warsh, who is stuck between faster price growth and Trump’s insistence of aggressive rate cuts, “could put his thumb on the scale during the [post-decision] press conference and tip things in a dovish direction by reiterating” that several Fed members have indicated rate reductions would be warranted should the Iran conflict be resolved soon.