Gold mounted a strong rebound in the final sessions of last week after Trump ruled out strikes on Iran ahead of the November elections, adding that the two sides had been holding productive discussions. The headlines triggered a relief rally in gold, which accelerated as Treasury yields and the US dollar pulled back. Gold is priced in US dollars and pays no yield, so easing yields and a softer dollar generally reduce the opportunity cost of holding the metal.

Progress stalled over the weekend, however. Iran said the US response to its proposal to reopen the Strait of Hormuz was insufficient. Tehran had outlined seven conditions for restoring normal maritime passage within seven days and indicated that some points remained unresolved. Negotiations aimed at bridging the differences are still ongoing. The waterway is a critical chokepoint for global oil shipments, a key reason its status is closely tracked by commodity and energy markets.

Looking ahead, attention will center on US-Iran developments and Wednesday's US Consumer Price Index report. The CPI is one of the inflation reports the Federal Reserve follows when assessing price pressures, making the release a key input for rate expectations. A hotter-than-expected core reading could raise the probabilities of a Federal Reserve rate hike in October, putting downward pressure on gold. A soft report, by contrast, would likely ease rate-hike concerns further and provide the precious metal with another boost.

Technical Analysis – Daily Timeframe

According to the original analysis, gold (the CFD contract) is trading near a downward trendline on the daily chart. Sellers are likely to step in around the trendline, with a defined risk above it, to position for a drop into the 3,885 level. Buyers, on the other hand, will want to see the price break higher to pile in for a rally into the 4,700 level, with the 4,500 mark as the first target.

Technical Analysis – 4-Hour Timeframe

On the 4-hour chart, a minor upward trendline has defined the recent pullback. If the price falls back into that trendline, buyers are expected to lean on it, with a defined risk below it, targeting a break above the downward trendline and an extension of the rally into the 4,400 level. Sellers will instead look for a break below the downward trendline to position for a drop into the 3,885 level.

Technical Analysis – 1-Hour Timeframe

On the 1-hour chart, the analysis sees limited additional signal: buyers are better off waiting for the price to pull back into the upward trendline or break above the downward one, while sellers will look for short opportunities around the downward trendline or on a break of the upward one. The red lines on the chart mark the average daily range for today.

Upcoming Catalysts

Wednesday brings the US CPI report. On Thursday, markets will receive the US PPI, US Retail Sales and the latest US Jobless Claims figures, with the full schedule available on the economic calendar. Together, the cluster of releases offers a single-week read on price pressures at the consumer and producer level, consumer spending and labor-market conditions.

This article is based on analysis originally published byForexLive/InvestingLive](https://investinglive.com/commodities/gold-rebounds-on-easing-geopolitical-tensions-and-stalls-eyes-on-us-cpi-as-the-next-key-catalyst/).