US President Trump stated that he has rejected Iran’s recent proposal to reopen the Strait of Hormuz, indicating that the strait will remain blocked if Iran does not agree to the terms of the US-set nuclear agreement. He also reiterated that if the US and Iran cannot reach an agreement, the US will destroy Iran’s remaining missiles and related systems. Trump’s warning is likely to further prompt investors to cash out in the gold market to avoid the risk of conflict with Iran; coupled with concerns about rising inflation driven by oil prices and the possibility of a Federal Reserve interest rate hike, this should put downward pressure on gold prices in the short term.

On the other hand, Powell’s hawkish comments at his last post-meeting press conference as Fed Chairman, suggesting adjustments to interest rates to counter rising inflation, will also influence gold prices to test lower support levels.

A short position can be established around $4,608, with a short-term target of $4,494 for profit-taking and a stop-loss at $4,628.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com