Gold prices experienced significant volatility on Monday, initially dropping before stabilizing as reports surfaced that the United States, Iran, and regional mediators are discussing a potential 45-day ceasefire deal. According to Axios, sources familiar with the talks revealed this framework, which could potentially reopen the strategically vital Strait of Hormuz.
The Strait of Hormuz, a critical waterway carrying approximately one-fifth of global oil shipments, has been largely closed since the Iran conflict began in late February. This closure has been a primary driver behind oil prices more than doubling this year. The ceasefire discussions follow a tense weekend where former President Donald Trump posted on Truth Social, threatening to target Iranian civilian infrastructure—including power plants and bridges—if tanker traffic was not restored by Tuesday evening at 8 p.m. ET. Trump had previously issued a 10-day deadline on March 26, which was set to expire Monday evening.
Spot gold was last trading near $4,655 an ounce after dropping as much as 1.6% earlier in the session, while gold futures rose 0.6% to $4,709. Gold has fallen roughly 12% since the conflict began in late February, as inflation fears pushed back expectations for Federal Reserve interest rate cuts. Strong US nonfarm payrolls data for March, which hit the highest level since late 2024, reduced the perceived urgency for the Fed to cut rates, creating a tougher environment for the non-yielding metal.
Meanwhile, WTI crude oil has been building upward momentum, having broken above the key $100 resistance zone and a descending trend line near $97.00. The market is now consolidating gains after reaching the $105.85 region, with potential to push towards the $110 level. Analysts note that a breakout above $106.85 could pave the way to $108 and then $110.
Market participants are closely watching technical levels. For gold, a notable bullish trend line offers support near $4,630 on the hourly chart, with the 50% Fibonacci retracement level of the move from $4,351 to $4,800 providing additional support. Resistance is seen around $4,695 and the key $4,750 level. Charu Chanana, chief investment strategist at Saxo Markets, noted that gold's 200-day moving average had held and that the late-month recovery suggested the sell-off may be easing, though the picture remains unclear with inflation risks and broader market pressures still present.
