Gold Rebounds Above $4,300: Can the Recovery Continue?

Gold prices have stabilised above the $4,300/oz level after weeks of sustained selling pressure that pushed the precious metal toward the key psychological support zone around $4,000/oz. The correction was largely driven by rising US inflation expectations amid prolonged uncertainty surrounding US-Iran peace negotiations. Concerns that persistent inflation could prompt a more hawkish Federal Reserve further weighed on investor appetite for the non-yielding asset.

Sentiment improved notably after reports emerged that Washington and Tehran had reached a preliminary memorandum of understanding, raising expectations for smoother oil flows through the Strait of Hormuz. The prospect of lower energy prices helped ease inflation concerns, reduced expectations of further monetary tightening, and supported a rebound in gold from its recent lows.

With the geopolitical risk premium in oil beginning to moderate, investors appear increasingly confident that the worst of the recent inflation scare may be behind them. Longer-term participants seem to have viewed the $4,000 region as an attractive accumulation zone, helping to underpin the recent recovery. Attention has now shifted to the Federal Reserve’s upcoming policy decision and forward guidance, which could provide the next major catalyst for gold prices.

From a technical perspective, gold remains vulnerable after breaking below its 200-day moving average (200-DMA), which now serves as immediate resistance. In the short-to-medium term, the zone between the 200-DMA near $4,440 and the 50-DMA around $4,580 is expected to act as a significant resistance band. On the downside, the psychologically important $4,000 level continues to attract dip-buying interest, with recent price action suggesting strong support emerging around this region.