Gold Coils in a Tight Range as Trump’s Strait of Hormuz Deadline Looms

• Gold holds steady as markets await Trump deadline, limiting risk-taking sentiment.
• Oil-driven inflation and rising yields continue to cap gold’s upside momentum.
• Key levels in focus as gold trades within range amid geopolitical uncertainty.

Gold prices turned flat along with equity markets on Tuesday morning’s session ahead of President Donald Trump’s self-imposed deadline for a deal with Iran for a ceasefire. Markets remained cautiously optimistic that some sort of an agreement could be reached that could avert further destruction of civilian infrastructure in Iran and the Gulf region.

But with time ticking, traders were in no mood to take any meaningful positions. Gold’s somewhat stable price action so far this week has followed the roughly 4% gain it recorded last week, despite falling on Friday on the back of a strong U.S. jobs report.

Gold prices have been stuck between a rock and a hard place. Support has come from haven flows while the US dollar and yields have applied pressure, all thanks to the oil spike. Should Brent oil remain above $110 or accelerate, then gold prices could come under renewed pressure as we head towards mid-week.

Trump’s Deadline Looms

The war in the Middle East has dragged on into its sixth week. Donald Trump ramped up the rhetoric, warning Iran has until 20:00 ET today to make a deal, otherwise, in his words, “all hell will rain down on them.” The US President doubled down on an earlier ultimatum, signalling that patience in Washington is wearing thin. He said if there is no deal by the deadline, the US military could destroy “every bridge in Iran”, adding that power plants would also be targeted.

On Monday, Trump emphasized that ensuring free navigation through the Strait of Hormuz must be included in any agreement to end the Middle East conflict, marking an apparent shift from his recent stance suggesting he was prepared to disengage from Iran even if the key shipping route remained closed.

“We have to have a deal that’s acceptable to me, and part of that deal is going to be we want free traffic of oil and everything,” said Trump.

With crude oil prices remaining supported on any dips, there’s been little indication so far that Iran is prepared to step back — or that the Strait of Hormuz will reopen anytime soon.

If there is no deal tonight, then this should keep risk appetite low, undermining stocks and holding the positively correlated gold back.

What About the Longer Term Forecast for Gold?

While the Middle East crisis points to heightened haven demand for gold, the recent gains for the dollar and bond yields mean even gold could be hurt during times like now. The metal, therefore, appears to be on a far less stable footing, compared to earlier this year.

The sharp sell-off in March reflected a broader repricing of expectations as the Iran conflict pushed oil above $100, fuelling inflation concerns and lifting both the US dollar and bond yields. That combination has proven toxic for gold, as the prospect of renewed central bank tightening has outweighed traditional safe-haven demand.

Looking ahead, the fundamental outlook hinges heavily on how the Middle East situation evolves. A de-escalation that brings oil prices lower could ease inflation fears and, in turn, reduce pressure on central banks to keep policy restrictive—something that would likely support gold. However, if tensions persist and energy prices remain elevated, the risk of prolonged higher rates could continue to cap upside.

That said, downside risks may still be somewhat contained. Inflation uncertainty and geopolitical fragility should keep a floor under demand, particularly from investors seeking protection against currency debasement. Meanwhile, central bank buying remains a key structural pillar, even if purchases have eased slightly in the short term.

Gold Technical Analysis and Key Levels to Watch

Gold is currently inside a trading range, which is reflected by prices being below the 21-day exponential and above the 200-day simple moving averages.

The first area of support to watch is between $4,580 and $4,600, followed by $4,500. However, the most important level for me remains $4,400, which marked the lows from early February. That level was briefly taken out during the sharp sell-off at the end of March, but we’ve since reclaimed it and seen a strong recovery.

Prices rallied from those lows to around the $4,800 area before easing slightly into Friday’s close.

As it stands, $4,800 is now acting as immediate resistance. Above that, $4,900 is the next level to watch, while the key resistance sits at the psychologically important $5,000 level — the point where the sell-off began on March 18.

But if the selling resumes and we see a potential break below that $4,400 level, then this could open the door for a move back towards the March lows, just below $4,100. Beyond that, the next major downside target would be the $4,000 psychological level.

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Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, counsel or recommendation to invest as such it is not intended to incentivize the purchase of assets in any way. I would like to remind you that any type of asset, is evaluated from multiple perspectives and is highly risky and therefore, any investment decision and the associated risk remains with the investor.

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