Gold’s outlook remains neutral to bearish amid geopolitical tensions and a shift in Federal Reserve policy. Gold prices are currently under pressure due to the US-Iran stalemate and rising tensions in the Strait of Hormuz.
The Federal Reserve is slowly becoming more hawkish. Analysts expect the central bank may drop its easing bias soon. This change impacts investor sentiment toward gold.
Gold lacks bullish drivers that supported it at the start of the year. A resolution to the US-Iran conflict could trigger a relief rally in gold prices. However, inflation may remain higher for longer due to increased economic activity post-conflict.
Gold is trading in the middle of two key trendlines, indicating uncertainty in price direction. There is a resistance zone around the 4,650 level for gold prices. The next target for sellers is the 4,350 level if the price drops further.
Upcoming US economic data releases:
- ISM Services PMI
- Job Openings
- ADP report
- Jobless Claims
- NFP report
- Consumer Sentiment survey
The buyers will likely continue to lean on the trendline to keep pushing into the resistance, while the sellers will look for a break lower to pile in for a drop into the 4,350 level next.
