Gold Steadies After Declines: Strait of Hormuz Back in Focus

Gold prices stabilised near 4,400 USD per ounce on Friday following a sharp decline the previous day. The market found support from Donald Trump's decision to postpone the deadline for reaching a deal with Iran to end the conflict.

The US has pledged to hold off on striking Iran's energy infrastructure until 6 April, offering some relief to market tensions. Trump also stated that Iran had allowed 10 oil tankers to pass through the Strait of Hormuz as a gesture towards the US.

Meanwhile, Tehran confirmed it had rejected the 15-point plan proposed by the US and put forward its own conditions, including recognition of its control over the Strait of Hormuz.

Gold lost nearly 3% the previous day amid doubts over the prospects for an imminent truce. Overall, the metal remains under pressure, with rising energy prices continuing to heighten inflationary risks and reinforce expectations of tighter policy from major central banks.

Technical Analysis

On the H4 XAU/USD chart, the market is forming a consolidation range around 4,353 USD. An upside breakout would pave the way for a correction to 4,820 USD, while a downside breakout could extend the downward wave to 4,272 USD. The MACD indicator confirms the current momentum, with its signal line currently below the centre line but pointing firmly upwards.

On the H1 chart, the market broke above 4,414 USD and completed a wave to 4,474 USD. Looking ahead, a corrective move back to 4,414 USD is likely, followed by a renewed advance towards 4,690 USD. The Stochastic oscillator supports this scenario, with its signal line remaining above 80 and showing continued upward pressure.

Conclusion

Gold has found a temporary respite following the US decision to delay strikes on Iranian energy infrastructure, easing immediate geopolitical tensions. However, Tehran's rejection of the US proposal and insistence on maintaining control over the Strait of Hormuz underscores how fragile the situation is. While the postponement offers a short-term reprieve, the underlying drivers – elevated energy prices, persistent inflation risks, and expectations of tighter central bank policies – remain. With technical indicators pointing to a potential corrective bounce, gold's broader trajectory will likely hinge on whether diplomatic efforts gain traction or tensions reignite after the 6 April deadline.

By RoboForex Analytical Department

Disclaimer:

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.