The situation in Iran is a case of “no good news is bad news.” The latest development is reports that the Iranian Islamic Revolutionary Guard Corps attacked two merchant ships in the Strait of Hormuz. Although no injuries were reported, the failure of Iran and the United States to advance the next round of negotiations raises concerns that tensions could escalate at any time. This renewed uncertainty in geopolitical factors is likely to increase investor activity in the gold market, seeking to mitigate the risks associated with the situation, putting downward pressure on gold prices in the short term.

On the other hand, if US crude oil prices continue to rebound, investors will likely worry that inflation will not easily fall back to a level where the Federal Reserve would not consider raising interest rates. Interest rate movements will also continue to put downward pressure on gold prices in the short term.

A short position can be established around $4,155, with a short-term target of $4,048 for profit-taking and a stop-loss at $4,175.

Gold Price 1-Hour Chart:

Ferris Kwok

Chief Analyst
Success Finance Group

Email: ferris.kwok@successfn.com