Gold Steadies Near $4,600 as Talks Limit Dollar Index FX

Key Moments

Gold Holds Support as Ceasefire Efforts Temper Dollar Gains

Gold began the new week under mild selling pressure but quickly found a floor near $4,600, with XAU/USD rebounding from that area in Monday’s Asian session. The recovery, however, lacked strong follow-through buying interest.

According to Bloomberg, citing Axios, the United States, Iran, and regional mediators are engaged in discussions over a potential 45-day ceasefire that could eventually halt ongoing hostilities. This development is keeping a lid on safe-haven demand for the US Dollar (USD) and is providing some support to bullion. At the same time, expectations for higher global interest rates continue to limit the upside for the non-yielding metal.

Inflation Concerns and Oil Strength Reinforce Higher-Rate Outlook

Market participants appear increasingly convinced that war-related spikes in energy prices will rekindle inflation pressures and push major central banks, including the Federal Reserve, toward a more hawkish policy stance. Crude Oil prices moved to an almost four-week high on Monday after US President Donald Trump threatened to strike Iran’s power plants and bridges if the Strait of Hormuz is not reopened by Tuesday.

In addition, Tehran introduced a new condition, indicating that transit through the key waterway could resume if part of the revenue is directed to compensate Iran for war-related damage. These developments are contributing to elevated energy prices and reinforcing concerns about persistent inflation.

Geopolitical Chokepoints and Trade Route Risks

Ali Akbar Velayati, an advisor to Iran’s new Supreme Leader, Mojtaba Khamenei, warned that the resistance front could target the Bab el-Mandeb Strait in the Red Sea, another strategically significant shipping corridor. Such threats raise the risk of broader disruptions to global trade routes, supporting firm Crude Oil prices and feeding into the inflation narrative that underpins expectations for higher-for-longer interest rates.

US Data Supports Hawkish Fed Expectations

The stronger-than-expected US Nonfarm Payrolls (NFP) report released on Friday pointed to a labor market that remains resilient. That data reinforced market speculation that the Federal Reserve may keep policy rates elevated for an extended period to combat inflation. The prospect of tighter US monetary policy has been supportive for the USD, adding to the cautious tone around Gold prices.

Given the latest intraday moves, market participants are watching whether XAU/USD can decisively break below $4,600 before concluding that the recent rebound from the $4,100 region – a four-month low seen in March – has exhausted itself. Traders are also focused on the upcoming release of the US ISM Services PMI for further direction later in the North American session, with overall trading conditions affected by thin liquidity amid the Easter Monday Holiday in many global financial markets.

Technical Picture: Gold Near Key Fibonacci Pivot

From a technical standpoint, the $4,600 level coincides with the 38.2% Fibonacci retracement of the March decline and serves as an important pivot area. Gold is trading clearly below the 200-period Exponential Moving Average (EMA) on the 4-hour chart, keeping the broader bias tilted to the downside.

The Moving Average Convergence Divergence (MACD) line has crossed below its signal line, with both lines hovering just under the zero mark. The negative histogram points to building selling pressure following the recent failure to maintain gains above $4,750.

The Relative Strength Index (RSI) stands at 52, reflecting a neutral configuration. However, the indicator’s retreat from overbought territory supports the notion that upside momentum is fading rather than indicating renewed buying demand.

Key Technical Levels for XAU/USD

Immediate resistance is seen near $4,758, where the 50.0% Fibonacci retracement aligns with a recent swing high. A move above that zone would bring the 200-period EMA, located around $4,791, into focus, followed by the $4,913 region at the 61.8% Fibonacci retracement. Only a clear break back above the EMA cluster would be sufficient to neutralize the prevailing bearish technical outlook.

On the downside, initial support is centered around the 38.2% Fibonacci retracement near $4,600. A sustained move below that area could trigger a deeper decline toward the 23.6% retracement around $4,411. If that level gives way, the path would open for a potential test of the psychologically important $4,300 zone.

(The technical analysis of this story was written with the help of an AI tool.)

US Dollar Performance Overview

The following table summarizes the percentage changes of the US Dollar (USD) against major currencies today, highlighting that the USD has been strongest versus the Swiss Franc.

The referenced heat map illustrates percentage changes among major currencies, where the base currency is selected from the left column and the quote currency from the top row. For example, choosing the US Dollar on the left and moving horizontally to the Japanese Yen cell shows the percentage change for USD (base)/JPY (quote).