Gold climbed back above $4,050 on Monday after President Trump signaled that peace talks with Iran would resume, cutting into the safe-haven demand that had cushioned the metal during its recent slide. The bounce comes as gold works through a correction that has cut roughly 27% off January's record high, with Friday's US jobs report now shaping up as the next major catalyst.
Iran talks ease pressure on gold
Gold climbed back above $4,050 on Monday, after President Trump signaled that peace talks with Iran would resume. The signal followed pressure from regional allies like Saudi Arabia to pause military strikes.
The news pushed oil prices lower and eased inflation fears, but it also cut into the safe-haven flows that had propped up gold.
A correction that has erased 27% from January's peak
Gold hit an all-time high near $5,602 in January. Since then, the metal has dropped roughly 27% from that peak, weighed down by rising Treasury yields, a firmer dollar, and cooling demand for safe-haven assets. Despite the sharp correction, most analysts still expect gold's long-term uptrend to eventually reassert itself.
Friday's jobs report and the key technical levels
In the near term, all eyes are on Friday's US jobs report, the week's key catalyst: a weak print could revive rate-cut expectations and give gold fresh support, while a strong one could extend the pullback.
On the XAU/USD chart, gold remains locked in a downtrend since January's record high, testing a descending trendline while holding above the 3,900-4,000 support zone. A bounce from that support, backed by RSI divergence, lends some credibility to the bullish case: a decisive break above the trendline would open the path to the 4,400 resistance zone, where the 200-period EMA also converges.
The bearish case is a rejection of the trendline that traps gold between resistance above and support below. A strong jobs print could tip that balance, breaking the 3,900-4,000 support and opening the path toward the 3,400-3,500 zone, the former resistance that has since turned into support.
Source: ActionForex
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