Gold surges above $4,100 as US-Iran deal expectations ease inflation and Fed-tightening risks
Key Takeaways
- •Qatari mediators said draft language had been prepared for a possible US-Iran agreement.
- •US Treasury Secretary Bessent said an Iran deal could come as soon as today and could include reopening the Strait of Hormuz.
- •The prospect of a deal lifted risk assets and pushed oil prices lower as inflation and Fed tightening concerns eased.
- •Gold broke above a downward trendline on the daily chart, with the next major technical area near 4,500.
- •Upcoming US CPI data will be closely watched because it may influence expectations for the September FOMC decision and Jackson Hole Symposium.
Fundamental Overview
Gold has finally found some footing after a pair of headlines yesterday pointed to an imminent US-Iran deal. The first lift came from Qatari mediators, who said the language for a possible US-Iran agreement had been drafted.
Momentum accelerated when US Treasury Secretary Bessent confirmed that an Iran deal could come as soon as today and would include the reopening of the Strait of Hormuz.
The market response was direct: risk assets rallied and oil prices fell as inflation concerns eased and the risk of Federal Reserve tightening diminished. That dynamic has also supported gold, as real yields and the US dollar declined. In practice, this puts the metal back in focus as a hedge against policy uncertainty, while the near-term driver remains the incoming US data that can either reinforce or challenge the softer-rate narrative.
Barring another escalation, the upside should remain supported in the short term. The next major test will come next week with the release of the US CPI report. The data will be critical for the September FOMC decision and the Jackson Hole Symposium.
A hot report would likely trigger a selloff in gold as traders increase bets on a September rate hike. A soft report, on the other hand, would further reduce the risk of Fed tightening and give gold another boost.
Gold Technical Analysis – Daily Timeframe
On the daily chart, gold has now confirmed a break above the downward trendline, opening the door for a rally toward the next major trendline near the 4,500 level. If price reaches that area, sellers may lean against the trendline with defined risk above it and position for a drop toward the 3,885 level. Buyers, meanwhile, will look for a break to increase bullish bets toward new record highs.
Gold Technical Analysis – 4-Hour Timeframe
On the 4-hour chart, price action has been mostly rangebound since late June because of the US-Iran crisis, but the recent positive developments could lead to a breakout. Buyers will need price to break above the 4,200 resistance to gain more conviction for a trend reversal. Sellers, on the other hand, will likely step in around resistance with defined risk above it to position for a move down toward the 3,885 level.
Gold Technical Analysis – 1-Hour Timeframe
On the 1-hour chart, price broke above the minor resistance zone around 4,120 following the news about an imminent US-Iran deal. If price pulls back to retest the former resistance as support, buyers may step in with defined risk below the minor upward trendline while still targeting a break above 4,200. Sellers, meanwhile, will want to see price move lower before re-entering for a drop toward 3,885.
The red lines define the average daily range for today.
Upcoming Catalysts
Today, the US ADP and ISM Services PMI are due. Tomorrow, the latest US Jobless Claims figures will be released. On Friday, the week concludes with the US NFP report.