Reduced Strait of Hormuz disruption fears push Gold down

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Gold drops 2.67% today to $4,146

Highlights

Escalating U.S.-Iran tensions and helicopter incident have revived concerns over potential oil supply disruptions and global inflation.
Despite a recent fragile ceasefire easing extreme fears, fading risk to the Strait of Hormuz is tempering safe-haven flows into gold.
Gold sustains bearish momentum, trading below major moving averages with a 79% probability of further downside toward a $4,021.57 to $4,271.33 range.

Safe-haven demand wanes as conflict fears subside in Middle East

Tensions between the U.S. and Iran escalated after the U.S. president accused Iran of downing an American military helicopter, increasing the risk of renewed conflict and the potential for oil supply disruptions. This incident, in combination with the broader Middle East crisis, has driven oil prices higher and reignited global inflation concerns, shifting sentiment around commodities linked to inflation hedging, including gold. While a fragile ceasefire between Israel and Iran has provided temporary stabilization, fading fears of a lasting disruption to the Strait of Hormuz have contributed to easing safe-haven demand for gold.

Downside momentum strengthens as technical barriers reinforce selling

On the H4 timeframe, XAU is trading below the MA-20 at $4,266.90 and the MA-50 at $4,342.38, while also holding under the MA-200 at $4,636.81 on the daily chart. The Ichimoku Kijun level sits at $4,258.20, acting as immediate resistance. Momentum indicators remain negative: MACD and ADX confirm ongoing selling pressure, with pronounced seller dominance reflected by oversold readings on RSI (22.26), Stoch RSI, CCI, and BBP. The Awesome Oscillator also supports the persistent downside momentum, and price action is closely aligned with these indicators.

Consolidation likely as resistance holds and bearish momentum persists

Looking ahead, XAU is expected to trade within the $4,021.57 to $4,271.33 volatility band relative to current levels over the next several days. There is a 21% probability of an upward reversal, while the likelihood of continued downside stands at 79%. The base scenario favors consolidation within the established range; a bullish scenario would require a break above the $4,258.20 resistance, while any sustained move below $4,021.57 support could drive a deeper bearish extension.

Anton Kharitonov, expert at Traders Union, notes that gold’s technical picture remains weak, with price action below all key moving averages and momentum indicators showing persistent selling. He sees that receding geopolitical risks and fading safe-haven demand further limit gold’s upside. The analyst believes any short-term recovery will require a clear move above $4,258.20. "Base scenario is sideways or lower as long as resistance holds — bearish bias stays intact for now."

Earlier, analysts noted that gold faced heightened vulnerability to further declines due to persistent bearish momentum and oversold technical readings. The latest escalation in geopolitical tensions, coupled with renewed inflation concerns, reinforces selling pressure and underscores the importance of monitoring for a sustained breakdown below $4,021.57 as a risk for deeper downside moves.

Source of Data: XAU Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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