Gold Holds Near $4,000 as Oil Prices Drop Amid U.S.-Iran De-Escalation

Spot gold and silver gained modestly in late-afternoon U.S. trading on Monday, with gold near $4,075.60 an ounce, up 0.59%, and silver at $58.29, up 0.45%. The advance came as oil prices fell after a pause in attacks between the United States and Iran, reducing the inflationary pressure from higher energy costs.

The Federal Reserve’s policy meeting on Wednesday remains the primary macro risk for precious metals. Markets assign a meaningful but not dominant chance of a 25-basis-point rate hike, and the possibility that the Fed will keep policy restrictive is limiting gold’s upside.

The Strait of Hormuz, which previously moved roughly 15 million barrels per day of Persian Gulf oil, continues to be a key risk factor for energy markets and, by extension, gold. The recent de-escalation lowered Brent crude to $85.87 a barrel, down 6.3%, and U.S. crude to $82.61, down 7.5%, easing some oil-driven inflation concerns and allowing Treasury yields to slip.

U.S. equity indexes ended mixed, with the S&P 500 flat, the Dow up 0.5% and the Nasdaq down 0.2%, reflecting the benefit to fuel-sensitive stocks and pressure on technology shares. The 10-year Treasury yield hovered near 4.6% and the dollar index was little changed.

Technical analysis shows gold bulls targeting resistance between $4,162 and $4,214, with a longer-term aim near $4,221 and $4,383. Bears would need a break below $3,960 to open a downside path toward $3,942 and $3,886. Silver’s next resistance lies around $63.30, while a break below the 20-day average near $58.80 could lead to lower levels.