Gold – remains largely unchanged despite escalating geopolitical tensions
Gold edged lower on Monday after opening the week with a sharp $20 gap higher, driven by escalating concerns that conflict in the Middle East could spiral out of control following a U.S. strike on Iran over the weekend.
The initial rally brought prices close to the key $3400 resistance zone—an area marked by psychological significance and a previously broken trendline that now acts as resistance. However, momentum faded, and the metal failed to break higher.
Despite the heightened geopolitical risk, markets showed limited flight-to-safety demand, with traders remaining cautious and largely on the sidelines, awaiting more concrete developments from the conflict zone.
Gold traded within a narrow range on Monday and remains under pressure as long as it stays below $3400. However, immediate downside risks appear contained while the price holds above the 20-day moving average at $3352, a level that has consistently supported the uptrend over the past month.
Daily technical indicators remain mostly bullish, with the broader uptrend intact—supporting the view that recent price action may be a healthy correction before another leg higher. This is further reinforced by persistent geopolitical uncertainty, particularly following Iran’s vow to retaliate against the U.S. strike.
For bulls to regain control, a decisive break above $3400 is needed, which would shift near-term focus toward the next major resistance around $3450 (May 13/17 highs), and ultimately the all-time high at $3500.
On the flip side, a break below the 20DMA would weaken the short-term structure and expose the key Fibonacci support at $3325 (38.2% retracement of the $3120–$3452 move), followed by stronger downside targets at $3300/$3286 (psychological support and 50% retracement). A loss of these levels would shift momentum in favor of bears.
In the current environment, traders are advised to exercise heightened caution and remain open to non-traditional market behavior. Recent price reactions have often defied fundamental expectations, highlighting the need to act only on clear and confirmed signals.
Res: 3400; 3414; 3437; 3452
Sup: 3340; 3352; 3340; 3325
