Gold price holds above key support after dramatic fall

Gold prices are trading within a narrow range in early Tuesday sessions. On Monday, after falling to $4,480, the metal rebounded as buyers identified short-term support just below the $4,500 level. This recovery may also be attributed to renewed optimism regarding a potential US-Iran agreement.

However, after testing the initial weekly resistance at $4,580/85, gold retreated to $4,530, indicating that bullish momentum is currently insufficient to overcome prevailing supply. On the macroeconomic front, renewed US dollar strength and ongoing uncertainty in the Middle East have limited further gains.

Gold Fundamental Analysis

Gold experienced a sharp decline last week, driven by persistent US dollar strength as markets scaled back expectations for Federal Reserve rate cuts this year. Despite this, bulls have attempted to maintain prices above the $4,500–$4,480 support zone to prevent increased bearish pressure and further sell-offs.

Key drivers for gold this week include geopolitical developments and US dollar movements. Additionally, market participants should monitor significant economic events, such as the release of US FOMC meeting minutes and S&P Global PMI data. US bond yields and broader market risk sentiment are also expected to influence the dollar and, consequently, gold prices.

Gold (XAUUSD) Technical Outlook

Gold remains stable after its recent retreat. On the daily chart, prices briefly dipped below $4,500, forming a low at $4,480 before beginning to recover. The $4,580/85 resistance area will be closely watched this week. A sustained move above this zone could lead to further resistance at $4,620 and $4,640–$4,645. On the downside, $4,480/60 remains a critical support level. Furthermore, the chart below reveals a few key levels that act as the areas of supply and demand for this week.

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