Gold prices stabilised during Thursday’s North American trading session after reports emerged that a draft agreement between the United States and Iran had been finalised, easing geopolitical tensions and triggering sharp moves across global markets.
Spot gold traded around USD $4,538 per ounce, recovering from earlier weakness as investors weighed the impact of a potential ceasefire agreement alongside ongoing concerns surrounding inflation and US interest rates.
According to reports from Iranian and Middle Eastern media outlets, the proposed agreement includes an immediate ceasefire across all fronts, commitments to avoid attacks on infrastructure, and guarantees for freedom of navigation through the Persian Gulf and Strait of Hormuz. The draft also reportedly includes the easing of US sanctions on Iran and the beginning of negotiations on unresolved issues within seven days.
The developments sent oil prices sharply lower, with West Texas Intermediate crude falling more than 2 per cent as fears of supply disruptions eased. At the same time, the US Dollar lost momentum, helping Gold recover after earlier declines.
Despite the temporary relief in geopolitical tensions, markets remain cautious as the US Federal Reserve continues to signal concern over persistent inflation pressures. Recent Federal Reserve meeting minutes showed policymakers divided between holding rates steady and potentially raising rates further if energy related inflation risks continue.
Richmond Federal Reserve President Thomas Barkin said policymakers remain alert to risks on both sides of the Fed’s mandate, while Chicago Fed President Austan Goolsbee warned that inflation progress has stalled in recent months.
Meanwhile, US economic data remained relatively strong. Initial Jobless Claims fell slightly to 209,000, while S&P Global’s Manufacturing PMI rose to a four year high as businesses increased inventories amid ongoing supply concerns.
Technical Outlook for Gold
From a technical perspective, Gold remains in a consolidation phase following its recent correction from record highs earlier this year.
Analysts note that momentum indicators remain cautious, with sellers continuing to focus on the USD $4,500 support zone. A sustained break below USD $4,453 could open the door toward USD $4,400 and potentially the 200 day moving average near USD $4,346.
On the upside, resistance is seen near USD $4,590. A breakout above this level could see Gold retest USD $4,600, followed by stronger resistance around USD $4,620 and USD $4,678.
Despite short term volatility, the broader outlook for Gold continues to be supported by central bank buying, global debt concerns, persistent inflation pressures, and ongoing geopolitical uncertainty.
