Gold traded around 3,950 USD per ounce on Tuesday after rebounding from annual lows. Lower oil prices and signs of US-Iran diplomatic progress eased inflation concerns, but the four-hour chart still shows a downward structure.
Gold traded around 3,950 USD per ounce on Tuesday after rising almost 2% the previous day. The metal rebounded from annual lows as lower oil prices and signs of diplomatic progress between the US and Iran somewhat eased inflation concerns.
Iran talks pull the oil premium lower
US President Donald Trump announced progress in the negotiations. Meanwhile, Iranian President Masoud Pezeshkian stated his government had received greater powers from the country's Supreme Leader to continue peace talks. According to ActionForex, the decline in the geopolitical premium on oil reduces the risk of renewed inflationary pressure, supporting gold.
Still, the precious metal has remained under strong pressure throughout the year. The Middle East conflict kept energy prices high, fuelled inflation and prompted central banks to raise interest rates. A global sell-off in technology and AI stocks added to the strain, triggering widespread liquidation of positions that weighed on precious metals.
Investors now watch the US midterm elections closely. The Trump administration and the Republican Party face increasing political pressure from high energy prices, so oil prices and prospects for resolving the conflict remain key factors for gold.
Four-hour chart keeps a downward structure
On the four-hour chart, a sequence of lower highs and new lows keeps the downward structure intact. After declining to 3,870 USD, the market recovered towards the 3,970 USD area, but buyers failed to consolidate above it. For the 4 November session, the baseline scenario envisages a test of support at 3,906 USD, with a possible continuation towards 3,880 and 3,870 USD.
The MACD indicator sits below zero, consistent with dominant downward momentum. However, the latest histogram bars are shrinking in absolute terms, so the indicator does not yet suggest intensifying selling pressure. The nearest resistance is around 3,939 USD, with the next resistance area at 3,970 USD.
An alternative scenario sees price holding above 3,906 USD and recovering towards 3,939 USD. A sustained close above that resistance would open the way towards 3,970 USD and 3,976 USD. Until such confirmation appears, the downward scenario remains the priority, and any growth is considered corrective.
Source: ActionForex
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