Gold pushed back above $4,100 after signs of progress toward a US-Iran deal eased fears tied to a Fed tightening cycle. Qatari mediators and US Treasury Secretary Bessent both pointed to an imminent agreement that would reopen the Strait of Hormuz, pulling oil lower and the dollar down. Next week's US CPI report now decides whether the rally holds.
Iran deal hopes drive the rally
Gold rebounded above $4,100 after Qatari mediators said the language for a possible US-Iran agreement had been drafted. Momentum built further when US Treasury Secretary Bessent confirmed an Iran deal could come as soon as today and would include reopening the Strait of Hormuz.
As a result, risk assets surged and oil prices fell on easing inflation concerns and reduced Fed tightening risk. The latter also supported gold, as real yields and the US dollar declined. Barring another escalation, the upside should remain supported in the short term.
CPI report is the next test
Next week's US CPI report will be critical for the September Fed decision and the Jackson Hole Symposium. A hot inflation reading would likely trigger a selloff in gold as traders increase bets on a September rate hike. A soft report, on the other hand, would reduce the risk of Fed tightening and give gold another boost.
Chart points toward $4,500 if buyers hold
On the daily chart, gold has confirmed a break above its downward trendline, opening the door to a rally toward the 4,500 level, with a rejection there risking a drop back to 3,885. On the 4-hour chart, buyers need a break above 4,200 to gain conviction for a trend reversal, while sellers would look to lean on that level for a drop back toward 3,885.
A separate Investing.com analysis found gold climbing for a third straight day, a stretch not seen in five weeks, after clearing resistance at 4,090/4,100 to target last week's high near 4,119/4,120. That analysis flagged 4,135/4,140 as the next hurdle, with a sustained break above 4,140 opening a path to Fibonacci resistance at 4,160/4,170, and a move above 4,175 seen as a medium-term buy signal that could extend gains toward 4,210/4,215.
Sources: Investinglive RSS Breaking News Feed, Commodities Analysis & Opinion
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